GUESSING GAME CONTINUES
NASS said U.S. corn stocks on March 1 were 5.399 billion bushels. That was 400 million bushels more than most traders expected, one of the largest misses in the past 30 years.
"This is still a mystery to everyone involved in the process. Disconnects between expectations and USDA stock estimates have occurred off and on in the past, but the frequency of the disconnect appears to have increased," University of Illinois economist Darrel Good told the Reuters Ags Forum, an online industry chat room.
Going back to March 2010, 11 of the past 13 NASS quarterly stocks figures have been well out of sync with private estimates, Good said, generating huge price swings in the Chicago Board of Trade corn futures market.
The latest instance sent prices down the 40-cent daily trading limit and nearly $1 a bushel since, although a strong corn basis in the cash market, an indicator of tight supplies, has raised doubts about stocks figure.
The recent history of NASS "losing" grain stocks in one quarter and then "finding" them the next added to uncertainty about its next quarterly report on June 28. Some think NASS may undo the March estimate with a large stocks cut in that report.
NASS says it stands by its quarterly estimates, gleaned from a survey of more than 83,000 farms and a survey of 8,800 off-farm storage facilities and reviewed for reasonableness and consistency with historical norms.
So grain analysts stay puzzled, though they offer theories for the discrepancies, such as difficulty in predicting corn use by ethanol makers or the use of cheaper alternative feeds by livestock and poultry producers. Some say the 2012 crop may have been undercounted or that larger corn crops outside of the traditional Midwest Corn Belt has skewed historical trends.
"The most obvious factor is that high prices lead to the most efficient use of corn possible, so we should have expected very low feeding rates per animal unit," said Tim Emslie, director of research for CHA Hedging.
Emslie, reflecting the complex calculus for corn analysts, also said "visibility" of corn stocks is greater when they are not in transit, as has been the case recently due to low corn exports and reduced use by ethanol makers.