Corn Stocks Surprise with Higher-than-Expected Levels Amid Record-High Diesel Costs
The US corn stocks report for September surprised grain traders with a higher-than-expected stockpile of 2.095 billion bushels, up from 1.922 billion in August.
Mike Castle, senior commodities economist at StoneX in Kansas City, Missouri, called the figure 'ugly' and said it would be bearish for the market.
Castle noted that the increase was due to a higher-than-expected carry-in of old-crop corn, which makes the new crop look larger and raises the bar for any rally.
However, Castle expects strong demand for US corn exports in the year ahead, especially if the Black Sea remains disrupted.
Diesel prices have also hit record highs, with national diesel costs at their tightest point in history due to distillate stocks being low. Castle said this will put pressure on farm profitability and lead to margin compression.