|
 “The estimate of March 1 stocks allows for a calculation of feed
and residual use of corn during the second quarter of the
2014-15 marketing year,” said Darrel Good. “The implied feed and
residual use during the first half of the marketing year allows
for an evaluation of the USDA’s current projection of feed and
residual use for the entire marketing year. The March 1 stocks
estimate of 7.745 billion bushels implied second-quarter feed
and residual use of 1.425 billion bushels and use during the
first half of the marketing year of 3.64 billion bushels.
First-half use represents 69 percent of the USDA’s
marketing-year projection of 5.3 billion bushels. That is less
than the average of 74 percent in the previous four years but is
very close to the 68-percent average for the period 2006-07
through 2009-10.”
Good said that although the March 1 stocks estimate is 136
million bushels larger than the average trade guess, it does not
imply that feed and residual use is progressing at a slower rate
than implied by the USDA projection.
“Given the expansion that is taking place in hog, broiler, and
dairy cow numbers, the projection of 5.3 billion bushels for the
year still appears reasonable,” Good said. “Another read on feed
and residual use will not be available until the June 1 stocks
estimate is released on June 30.”
According to Good, the March 1 soybean stocks estimate allows
for a calculation of seed and residual use during the second
quarter and first half of the 2014-15 marketing year. Because
both the size of the domestic crush and the magnitude of exports
are reasonably well known, the magnitude of seed and residual
use of soybeans during the first half of the marketing year also
provides some insight on the likely accuracy of the 2014
production estimate. He said the March 1 stocks estimate this
year was of particular interest because the Dec. 1 stocks
estimate implied that seed and residual use during the first
quarter of the marketing year was record large by a wide margin.
“The March 1 stocks estimate of 1.334 billion bushels was about
12 million bushels below the average trade guess and implies
that seed and residual use of soybeans was -13.5 million bushels
in the second quarter of the marketing year and 263.4 million
bushels during the first half of the marketing year,” Good said.
“Although there has not been a strong correlation between seed
and residual use of soybeans during the first half of the year
and subsequent changes in the estimated size of the previous
year’s harvest, the very large implied use this year hints that
the 2014 soybean crop may have been overestimated.”
The estimate of planting intentions allows for a projection of
the magnitude of harvested acreage and in combination with a
trend-yield calculation allows for an initial calculation of the
potential size of the 2015 harvest. Producers reported
intentions to plant 89.199 million acres of corn in 2015, 1.4
million less than were planted in 2014, but about 470,000 more
than the average trade guess.
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“The decline in corn acres is mostly offset by increased planting
intentions for other feed grains,” Good added. “Relatively small
changes in corn acreage are reported for most states, with the
largest change being a 600,000-acre reduction in South Dakota.
Planting intentions point to acreage harvested for grain of about
81.7 million acres. The farmdoc daily article of Feb. 26, 2015,
developed a trend corn-yield projection of 164 bushels, pointing to
a 2015 crop of 13.4 billion bushels, 816 million bushels smaller
than the 2014 crop. If consumption next year is equal to that
projected for the current year, year-ending stocks would decline
from 1.777 billion bushels projected for Sept. 1, 2015, to about 1.5
billion bushels on Sept.1, 2016.”
Good said producers reported intentions to plant 84.635 million
acres of soybeans in 2015, 934,000 more than were planted in 2014,
but nearly 1.3 million less than the average trade guess. Planting
intentions for other oilseed crops (canola, peanuts, and sunflowers)
exceed last year’s plantings by about 190,000 acres. Relatively
small changes in soybean acreage are reported for most states, with
the largest change being a 300,000-acre reduction in Nebraska.
Planting intentions of 84.635 million acres point to harvested
acreage of about 83.7 million acres. The farmdoc daily article of
March 19, 2015, developed a trend soybean-yield projection of 44.6
bushels, pointing to a 2015 crop of about 3.733 billion bushels,
about 235 million bushels smaller than the 2014 crop.
“If consumption next year is equal to that projected for the current
year, year-ending stocks would increase from 385 million bushels
projected for Sept.1, 2015, to about 435 million bushels on Sept.1,
2016,” Good said.
Compared to pre-report expectations, Good said the March 1 soybean
stocks and 2015 planting intentions estimates represent modestly
friendly surprises. “On the other hand, the stocks and planting
intentions estimates represented modestly negative surprises for the
corn market. Part of the negative corn price response to the
estimates likely reflects inflated trend yield estimates for 2015
and perhaps an incorrect interpretation of the pace of feed and
residual use during the first half of the marketing year. Attention
will now turn to spring weather and planting progress,” he said.
[Debra Levey Larson, University of
Illinois] |
