USDA's Sept. 1 Grain Stocks and Small Grains Summary featured some minor downward revisions to the 2022-23 corn and soy crops, but the big changes came in stocks of corn and soybeans and final production on wheat. The overall bearish report, except for corn, sent all three markets to sizable losses on Friday.
CORN
With the Dow Jones trader survey looking for a Sept. 1 stocks number of 1.433 billion bushels (bb), USDA surprised with a much lower-than-expected 1.361 bb final stocks number. That figured to be 91 million bushels (mb) lower than the September World Agricultural Supply and Demand Estimates (WASDE) estimate, and down 16 mb from a year ago. The fourth quarter disappearance was pegged at 2.75 bb, down 220 mb from a year ago on sluggish export demand. Feed and residual demand appeared to be far higher than the previous WASDE report. In another change, the 2022-23 corn crop was revised down by 15 mb, with yield being 173.4 bushels per acre (bpa), an increase of 0.1 bpa. A total of 605 mb was stored on-farm and 756 mb off-farm.
The report was mildly bullish for the corn market. However, pressure from the bearish wheat and soybean data spilled over into the corn market, sending December corn down sharply.
SOYBEANS
Sept. 1 soybean stocks were expected to come in at 244 mb, and instead were reported to be 268 mb -- up 18 mb from September's WASDE and down just 6 mb from a year ago. On-farm stocks were just 72 mb, while off-farm stocks were 176 mb. The soybean crop for 2022-23 was also revised downward by 5.9 mb to 4.270 bb. The June through August disappearance figured to be 528 mb, down 24% from a year ago. The production number used 87.5 million acres planted and 86.2 ma harvested. Yield was increased by 0.1 bpa to 49.6 bpa.
Soybeans were trading about a nickel lower before the report, but the numbers were considered bearish, and November beans sold off hard, challenging the $12.75 area of support.
WHEAT
Perhaps the biggest surprise in the USDA report came in the small grains summary, especially wheat production. Wheat stocks on Sept. 1 came in about as expected, at 1.780 bb or just 6 mb above trade expectations, and just 2 mb above last year, so that was neutral.
All wheat production was revealed to be 1.812 bb compared to trade expectations for 1.731 bb, or 81 mb higher. That figures 10% higher than last year's 1.650 bb total. Harvested acres were reported at 37.3 million and up 5% from a year ago, with an average yield of 48.6 bpa, 2.1 bpa higher than last year.
Winter wheat was reported to be 1.25 bb compared to the average estimate of 1.223 bb. Hard red winter, at 601 mb, was about 18 mb higher than expected, with soft red production of 449 mb, 9 mb higher than pre-report estimates. Perhaps the biggest change came in other spring production of 505 mb, or 57 mb higher than trade expectations. Hard red spring wheat of 468 mb is 55 mb higher than the July estimate. White wheat stocks of 198 mb were down just 4 mb from USDA's last report. The June-through-August disappearance in wheat was 614 mb and up 8% mb versus a year ago.
FINAL THOUGHTS
The net effect of the Sept. 1 quarterly Grain Stocks and Small Grains Summary was higher-than-expected soybean stocks and wheat production, resulting in a pummeling of those two markets. Even though the smaller-than-expected corn stocks were considered bullish, that market also finished with sharp losses. The wheat and soybean losses seemed to be far greater than such changes would have warranted.
December corn closed down 11 3/4 cents per bushel, and March corn was down 11 1/2 cents. November soybeans closed down 25 1/2 cents, and January soybeans were down 24 3/4 cents. December KC wheat closed down 21 1/4 cents, December Chicago wheat finished down 37 1/4 cents and December Minneapolis wheat was down 37 3/4 cents.
Dana Mantini can be reached at dana.mantini@dtn.com
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