Should I interpret the "ending stocks" to be growers putting away their yield for next year's supply? If so it looks like farmers stored significantly more corn and soybean this year!
This is such a good observation. "Ending stocks" are how much grain is not yet allocated to being processed or exported and can reflect on-farm storage, or also storage at grain elevators (for a fee!). I'll have to take a look at the next few month's USDA WASDE reports to see if there's any movement in ending stocks as the next season progresses
As always, incredible analysis! I read the piece on the go so I might have missed it, but I'd love to hear your thoughts on how storage availability influences the decisions growers have to make in times like these. Growers betting on futures without having to use complex financial instruments, using instead their own physical goods.
Thanks so much Fernando! Grain marketing definitely deserves its own Topsoil edition, it was hard to not dive too deep into that rabbit hole!
From what I understand, storage availability helps farmers have more flexibility when they sell their grain so they can ideally sell when prices are higher (prices are typically lowest during harvest and go up in the spring and early summer when there is greatest uncertainty on how the next year’s crop is looking). On a macro level, as more farmers (at least in the US) have been adding storage, I imagine the volume of grain carryover from year to year also increases.
Should I interpret the "ending stocks" to be growers putting away their yield for next year's supply? If so it looks like farmers stored significantly more corn and soybean this year!
This is such a good observation. "Ending stocks" are how much grain is not yet allocated to being processed or exported and can reflect on-farm storage, or also storage at grain elevators (for a fee!). I'll have to take a look at the next few month's USDA WASDE reports to see if there's any movement in ending stocks as the next season progresses
Hi Ariel,
As always, incredible analysis! I read the piece on the go so I might have missed it, but I'd love to hear your thoughts on how storage availability influences the decisions growers have to make in times like these. Growers betting on futures without having to use complex financial instruments, using instead their own physical goods.
Maybe an idea for a future post? 😉
Thanks so much Fernando! Grain marketing definitely deserves its own Topsoil edition, it was hard to not dive too deep into that rabbit hole!
From what I understand, storage availability helps farmers have more flexibility when they sell their grain so they can ideally sell when prices are higher (prices are typically lowest during harvest and go up in the spring and early summer when there is greatest uncertainty on how the next year’s crop is looking). On a macro level, as more farmers (at least in the US) have been adding storage, I imagine the volume of grain carryover from year to year also increases.
Thanks for the question and Merry Christmas!
This is such a great overview - I'm saving this one for when I need a quick resource on some of the numbers!