Grain stocks report confirms tight stocks situation

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The Grain Stocks report, issued by USDA’s National Agricultural Statistics Service (NASS) on March 31, 2011, shows relatively tight stocks for each of the feed grains. Corn stocks on March 1 were pegged at 6,523 million bushels, down 15 percent from the previous year. Stocks were considerably lower than most trade estimates, but about what USDA was expecting. Within a few days of the Grain Stocks report, May corn futures rose more than $1.00 a bushel, and prices exceeded the previous all-time high for the nearby contract, providing evidence that more price rationing needs to occur. With incentives to feed wheat this summer due to favorable wheat prices relative to corn, corn feed and residual use is lowered by 50 million bushels to 5,150 million bushels, offset by an increase in wheat feeding expected this summer.

Feed and residual use in the second half of the marketing year, forecast to be about 1,517 million bushels, is expected to be only 29.5 percent of the 5,150 million bushel marketing year total. This would be the lowest share since at least 1975. Feed and residual use in the second half of the year is expected to be the second lowest in absolute terms since 1975, behind the drought year of 1983. It would be down slightly from the 1,571 million estimated for 1995/96. Since 1995/96, corn used for ethanol is up more than 12-fold, adding substantially to available supplies of feed byproducts.

Projected sorghum feed and residual is increased by 10 million bushels this month and oat feed and residual is decreased by 15 million bushels, reflecting feed and residual use to date as indicated by the March 1 stocks. Feed and residual use for barley remains unchanged from last month.



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