September 11, 2011 US Factories Again Overcome Supply Snarls To Grow In September Video of Bomb drills at McCormick Plant Feb 2010

*US domestic demand for all four components of the components measured (grain-milling plant production, commercial oilseed processors, distillers grain, and chicken coops) increased in August. Despite lower rates of production, increases in all four components resulted in higher production and even larger stocks. Supply was hampered again as pastures that contain some crop residue and were moist in July and August were not able to hold much moisture when the weather dried up in August. At the same time, rising milk prices attracted producers to store some cash-grain after they had already sold it, reducing the current liquid stocks. Finally, exports of distillers grains and chicken eggs continued to rise due to strong demand.

*Farmers sold fewer corn acres and more soybeans and wheat compared with last year, decreasing expectations for output and potentially smaller commercial inventories. Even so, harvest progress was running behind last year. Some row crops received weather favorable enough to finish harvesting; others had several days or more to complete last, and this delay typically reduced overall commercial stocks. In this case, government forecasts showed actual commercial stocks not falling sharply from the July forecast, but declining less than we had expected. Therefore, August and September stocks probably will show an increase from the July forecast. This outcome was essentially expected as USDA’s forecasts of September stocks did not capture the additional delays in harvest.