Rising demand for US corn, soyabeans no match for massive supplies

The massive stockpiles of US corn and soyabeans left over following a summer of voracious demand raise the specter that huge supplies will continue to haunt the grain markets even as global usage continues to grow. In its quarterly stocks report released on Friday, the US Department of Agriculture (USDA) showed that the United States burned through corn and soyabeans at a furious clip during June, July and August.
Both corn and soya usage during the summer were the second biggest ever for the season. Soyabean crushers, exporters and end users sucked up 665 million bushels of the oilseed while the corn drawdown totalled 2.934 billion bushels. But despite the strong demand, farmers and grain handlers were still left with corn ending stocks at a 29-year high and soyabean ending stocks at a 10-year high. The piles of crops are not isolated to the United States - global grain supplies are plentiful after bumper harvests, keeping prices subdued.
"The demand short-term is not going to be able to catch up, said Don Roose, president of US Commodities. "Hopefully, somebody around the world has weather problems before we do. There's not a new demand on the market like we had with the biofuels."
Summer is usually the period of lightest demand for US soyabeans and corn as newly harvested supplies from South American competitors Brazil and Argentina are readily available. Crops from those countries are typically cheaper than US stocks.
But low prices caused many South American producers to keep a tight grip on their supplies, leaving more export opportunities for US offerings.
During the three months ended September 1, the United States went through 15.5 percent of the record 4.296 billion bushels of soyabeans harvested in 2016. It also used up 19.4 percent of the record 2016 corn production during that period.
The robust demand cannot keep up with the global supply boosts, with another record US soyabean crop expected to be harvested this fall.
Additionally, rising competition on the export market for both corn and soyabeans will again leave an oversupply of both commodities that need to be stuffed into already-filled elevators around the countryside.
Soyabean stocks are seen rising to 475 million bushels by the end of the 2017-18 marketing year, which would be the third biggest ending stocks figure on record. Corn stocks for 2017-18 have been forecast to rise 1.7 percent to 2.335 billion bushels.