Grain Marketing – How Tight Are Ending Stocks?

2011

  • David Moll
  • University of Wisconsin-Madison
Project Media

The 2010 growing season can be summarized by an early planting, higher temperatures, consistent rains, early harvest and record yields. As of December 10, 2010 USDA forecasted the Wisconsin corn crop at 162 bushels per acre, a new state record and 50 bushel per acre soybeans. Nationally, the corn crop is pegged at 154.3 and soybeans at 43.9. Grain prices traded downward from planting season until the mid-summer when demand for U.S. grains became stronger. There were production shortfalls in the world in China and Russia, which resulted in Russia placing an embargo on wheat exports. The growth in demand outpaced the large production levels resulting in a tighter year-over-year ending stocks situation. Corn ending stocks-to-use ratio is at historic lows. Moving into 2011, the tight ending stocks will continue to keep the grain markets at relatively higher price levels, but will also allow for high daily price volatility, as well as large price swings.