USDA is set to release the quarterly grain stocks report next Wednesday. Traders expect the numbers to be positive for the corn markets, but there is still the question of quality in what is left of the old crop in storage.
Drought in western Iowa last year affected the state’s most productive area and the derecho took out some acreage in the eastern region. Test weight and moisture contribute to lost bushels as well.
Ag economist Frayne Olson states, “When you answer your survey you write it down as 12,000, but it might be something a little less than that by the time you take it out and run it across the scale, and so, when we’re talking five-plus billion bushels of corn going into the livestock sector, you start to take a couple of percents here and a couple of percents there for test weight adjustments and or moisture adjustments and that adds up to some big bushels.”
The question remains if USDA has already accounted for these losses. One analyst says that traders expecting corn to disappear in relation to livestock feed demand could be surprised by next week’s figures.
