Fundamentally Speaking

Cash corn and soybean markets remain firm amid dwindling supplies with little farmer selling as they are busy out in the fields.

It will probably take a push to new highs at least in old crop to part with anymore of their 2020 bushels which in many cases were sold at levels quite a bit lower than values prevailing today.

In fact, in last month's WASDE report in explaining its unchanged projected U.S. average soybean price, the USDA noted that while current cash prices are significantly higher, prices received through January have averaged just over $10.00 per bushel, reflecting forward pricing at lower prices.

This can be seen in the accompanying graphic where not only is the total U.S. soybean stocks as of March 1 at 1.564 billion bushels (bb) the lowest for that date since 2016 but the farmer share at 594 million bushels (mb) is the lowest percent of total 3/1 on- and off-farm soybean stocks since at least 1990.

This chart shows March 1 on-farm stocks as a percent of total stocks on the left-hand axis and total stocks as percent of year ago figure for U.S. corn and soybeans on the right hand axis.

On-farm soybean stocks as of 3/1 are just 38.0% while for corn they are 52.4%, which other than the 49.4% seen in 2013 and 51.9% in 2011, is the third lowest share of total on- and off-farm corn stocks as of March 1 since at least 1990 as producers have already moved a lot of their 2020 corn harvest.

Also attesting to the incredibly tight soybean stocks is the fact that 3/1/21 bean supplies are 30.6% below the total 3/1/2020 inventory of 2.253 bb, the largest year-to-year percent drop also since 1990 exceeding the 27.4% decline in 2013 and the 24.6% drop in 2004.

3/1/2021 total U.S. corn stocks however are just 3.2% below the year ago total of 7.952 bb with the biggest March 1 to March 1 declines for corn seen back in March 1994 and March 1996 following the bad yielding corn years of 1993 and 1995.

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