Of the total grain stocks, 314 million bushels are stored on farms, down slightly from a year earlier, according to USDA’s “Grain Stocks” report issued today by the National Agricultural Statistics Service (NASS). Off-farm stocks, at 675 million bushels, are down 17 percent from a year ago. The June-August 2012 report indicated disappearance is 2.16 billion bushels, compared with 2.54 billion bushels during the same period last year.

Old crop soybeans stored in all positions on September 1, 2012 totaled 169 million bushels, down 21 percent from September 1, 2011. Soybean stocks stored on farms totaled 38.3 million bushels, down 21 percent from a year ago. Off-farm stocks, at 131 million bushels, are down 21 percent from last September. Indicated disappearance for June-August 2012 totaled 498 million bushels, up 23 percent from the same period a year earlier.

Based on an analysis of end-of-marketing year stock estimates, disappearance data for exports and crushings, and farm program administrative data, the 2011 soybean production is revised to 3.09 billion bushels, up 37.5 million bushels from the previous estimate. Planted area is revised up 70,000 acres. Harvested area is revised up 140,000 acres to 73.8 million acres. The 2011 yield, at 41.9 bushels per acre, is up 0.4 bushel from the previous estimate.

Ken Zaslow, BMO Capitol Markets US Research, characterized the data as “bullish for corn and wheat prices (neutral soybeans).” Zaslow noted that USDA’s estimated September 1 corn supplies of 988 million bushels was below the consensus market weight estimate of 1.113 billion.  Also, USDA’s wheat supply estimate of 2.104 billion bushels fell below the consensus estimate of 2.278 billion and the low-end of the expectation range (2.159 billion).  Soybean supplies of 169 million bushels exceeded consensus estimates of 131 million and the high end of the expectation range (152 million bushels).

Zaslow added that corn prices should move higher given the limited demand rationing. The lower-than- expected corn supplies indicate demand rationing has been limited and prices have not increased enough to incentivize sufficient demand restraint. The implication for soybean prices is more neutral as the tight global soybean supply outlook offsets the higher U.S. ending stocks.

In another related report, Prestage Farms and two other livestock companies in North Carolina have signed deals to import 750,000 metric tons  of corn from Brazil, Senior Vice President John Prestage told Reuters. The imports, made through agribusiness companies such as Bunge Ltd and Archer Daniels Midland, are the largest on record and come after the worst drought in half a century rallied grain prices to all-time peaks this summer. Reuters said the report is the first official confirmation that U.S. livestock companies are actually importing up to 1 million metric tons of corn from Brazil.

USDA projects U.S. corn imports at a record 1.9 million metric tons in the marketing year ending August 31, 2013. Livestock producers in the southeast in years past have imported feed wheat from Britain, and more recently, cattle feedyards in Texas bought wheat from Canada in August. As the weather turned hot and dry in late spring and early summer, Prestage said his company switched their animals to wheat, primarily brought in from Canada.

The imported corn is scheduled to arrive in 15 shipments of about 50,000 metric tons each over the next six months, and the first is scheduled to arrive at the Port of Wilmington, North Carolina, next week. Prestage said the purchases were made jointly by his family company, Murphy-Brown LLC, a subsidiary of Smithfield Foods Inc, and poultry company Nash Johnson & Sons’ Farms. The three companies are partners in Wilmington Bulk LLC, a grain and bulk commodity import-export facility at the Port of Wilmington. He said the companies were trying to buy more corn and other feed grains from South America and other sources. Prestage said costs were currently about 5 percent lower to import corn from Brazil than transport it from the Midwest.