Inventory-to-Use Ratio
The inventory-to-use ratio (or stocks-to-use) compares the stock of a commodity with how much is expected to be used over a period. Low ratios mean thin buffers, which tends to make prices higher and more volatile.
Grain traders don't just ask how big the harvest is. They ask how much will be left over at the end of the year compared with what gets used. That buffer, the stocks-to-use ratio, is one of the strongest price signals in commodities.
- Category
- Commodities, Energy and Carbon
- Reading time
- 3 min
- Also called
- Stocks-to-use ratio, Ending stocks-to-use, Stock-to-consumption ratio
- Updated
Stocks-to-use in plain words
It compares the stocks left at the end of a crop year with how much was used or exported during that year.1
Year-end stocks summarise supply and demand and are a useful indicator of price moves.2
High stocks typically mean lower prices, and low stocks tend to push prices up.2
How to calculate and read it
Get ending stocks
Take projected ending stocks for the marketing year.1
Get total use
Add domestic use and exports.1
Divide
Ratio = ending stocks ÷ total use, as a percentage.
Compare history
Place it in the historical range; e.g. US corn at 8.7% was near the low end.1
Expect nonlinearity
Prices respond more steeply as the ratio falls.2
Check the market
Futures may not follow a bullish ratio; corn stayed in a narrow, low range in 2025.1
Worked examples
Example 1 — Basic ratio
10%Hypothetical ending stocks 1.5 billion bushels, total use 15 billion.
| Ratio | 1.5 ÷ 15 = 10% |
Ending stocks relative to use summarise the balance sheet.2
Example 2 — Tightening
Tighter bufferUse rises to 16 billion and stocks fall to 1.2 billion.
| New ratio | 1.2 ÷ 16 = 7.5% |
| Change | 7.5% − 10% = −2.5 points |
Low stocks tend to push prices up, so a bullish read for longs.2
Example 3 — Nonlinear price effect
Price impact grows as stocks thinA hypothetical model adds $0.20/bu per point drop from 15% to 10%, and $0.50/bu per point below 10%.
| 15% → 10% | 5 × $0.20 = $1.00 |
| 10% → 7.5% | 2.5 × $0.50 = $1.25 |
| Total | $1.00 + $1.25 = $2.25 |
ERS models show a downward-sloping, nonlinear curve of prices against stocks-to-use.2
High vs low stocks-to-use
| Aspect | High ratio | Low ratio |
|---|---|---|
| Buffer | Thick | Thin |
| Price level | Lower | Higher |
| Volatility | Calmer | More volatile |
| Curve shape | Often contango | Often backwardation |
Where it's used
Grain markets
Reading monthly balance sheets.
Price forecasting
Feeding models of price levels.
Risk management
Expecting more Volatility when buffers thin.
Energy and metals
Comparing inventories with consumption.
Advantages and disadvantages
Advantages
- Summarises supply and demand in one number.
- Strong historical link to prices.
- Comparable across years.
- Widely published.
Disadvantages
- Relies on projections that get revised.
- Relationship is nonlinear.
- Global stocks may be unavailable or held by governments.
- Markets may already price in the number.
Going deeper
Read as far as you need. Each level builds on the one before it.
Common mistakes
Linear thinking
Assuming each point has the same effect.
Ignoring revisions
Treating a projection as final.
Forgetting exports
Using only domestic use.
Old news
Trading a ratio the market already priced.
Check your understanding
Test yourself before moving on. Each answer comes with an explanation.
Key points to remember
- Stocks-to-use = ending stocks ÷ use.
- Low ratios mean thin buffers.
- Thin buffers push prices up and raise volatility.
- The effect is nonlinear.
- Markets react to changes vs expectations.
Frequently asked questions
Where are stocks-to-use figures published?
Does it work for oil?
Is a low ratio always bullish?
Further learning
- Fundamental Analysis
Supply-demand analysis.
- Futures Contract
Where grain prices trade.
- Volatility
Why thin buffers swing.
- Economic Indicator
Reading scheduled data.
Sources
This article is written in our own words. The sources below support the specific facts, rules and figures marked with a number in the text. Links open the original publisher’s page.
- farmdoc daily (University of Illinois). The Corn Market Works to Explain Itself (opens in a new tab) Checked .
- USDA Economic Research Service. Price Determination for Corn and Wheat: The Role of Market Factors and Government Programs (TB-1878) (opens in a new tab) Checked .
Educational content, not financial advice. Examples use hypothetical prices and simplified costs; actual fees, margin rules and regulations vary by broker, market and country. We are not affiliated with any publisher linked above. Last reviewed . Report an error or request a source credit.