“Whistling past the graveyard” past the graveyard is one of my favorite sayings to describe an attempt to ignore the obvious. It is also a fitting way to explain USDA’s reluctance to ever drop its US soybean ending stocks number below 100 mb, regardless of what the market has been, is, and will continue to tell us. Saying this, keeps the alternate explanation in the shadows, that of the USDA systematically and purposely inflating US soybean ending stocks numbers until well after the fact, or in other words the September 1 stocks-on-hand figure released at the end of the September.
After I mentioned the similarity between 2020-2021 and 2013-2014 marketing years when it comes to USDA’s soybean ending stocks guesses, a friend sent in the question, “What did USDA show for soybeans ending stocks heading into September 1, 2014 Quarterly Stocks report?” It’s a great question and takes me back in time to a fun summer of Farm Show presentations about what an inverted forward curve means.
With the next data dump set for release later Monday morning, I’ve made the early Chart of the Day the comparison study of the 17-month report cycle leading up to the final September Quarterly Stocks report. Back in 2013-2014, with the soybean forward curve in a strong inverse (similar to what we saw for much of 2020-2021), USDA’s monthly US soybean ending stocks guesses (red line) were:
- May = 135 mb
- June = 125 mb
- July = 140 mb
- August = 140 mb
- September = 130 mb
- Before the September 30 Quarterly Stocks report (for September 1 stocks-on-hand) came in at 92 mb, the only time USDA has ever been below 100 mb.
As we approach the end of the 2020-2021 marketing year (green line) USDA’s guesses have been:
- May = 120 mb
- June = 135 mb
- July: One average pre-report guess I’ve seen is 134 mb, basically unchanged from June
Keep in mind at the end of last month the marketing year daily average of the cmdty National Soybean Price Index (weighted national average cash price) was $12.66, a price that correlates to a stocks-to-use calculation of 0.2%. My calculation of stocks-to-use at the end of 2013-2014, when cash soybeans posted a daily average of $13.18, was 0.1%. In its June round of supply and demand guesses, USDA’s numbers resulted in a stocks-to-use calculation of 3.0%.
A big difference as the government continued to whistle past the graveyard.