Carry Out Explained June 13, 2022
Carry out, ending stocks or end stocks all the same thing. They refer to what will be left over at the end of the year. For US corn and soybeans the marketing year starts September 1 and ends August 31. Our conversation in the commentary is on the changing beliefs of what will be left over as of August 31. China operates on an October – September marketing year. Brazil is April – March.
Our conversation, daily in the market, is on the changing beliefs of how supply and demand will impact ending stocks. It is a simply balance sheet that takes total supply (beginning stocks + production + imports) and subtracts estimates of demand. From an analyst standpoint, we follow a separate metric even closer, ending stocks divided by usage. Stocks to use is a measurement of tightness of supply that is strongly connected with grain pricing.
Each month the US government releases a closely followed report called World Agricultural Supply and Demand Estimates. In our commentary will simply call it WASDE. The link for USDA’s report is shown below. The corn balance sheet is also attached so you can see Friday’s US government table.
USDA estimates the current US old crop corn ending stock, what will be left over as of August 31, 2022, at 1,485 million bushels (1.485 billion). Allendale agrees with their latest increase for the old crop stock estimate. The two columns to the right show USDA’s speculation about new crop, the May crop report and the June crop report just released on Friday. USDA’s latest estimate is 1,400 million bushels (1.400 billion). This highly speculative number is closely watched. Remember, these are just estimates for what will be left over on August 31, 2023. There is a lot of sway in all of these numbers.
You’ll see below the table I’ve attached a chart of US corn ending stocks with the latest USDA estimates shown in dark green.
https://www.usda.gov/oce/commodity/wasde
– Rich Nelson
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