The USDA reports were bullish for corn with lower-than-expected quarterly stocks, but bearish for soybeans with higher soybeans in all positions. Wheat numbers were also bearish with higher-than-expected production, coming largely from a bigger spring wheat crop.
USDA’s 1.36-billion-bushel quarterly stocks estimate on corn was bullish as its the smallest since 2013-14, plus 70 million below estimates, and 90 million below USDA’s final ending stocks. The lower figure was in part due to a cut in production of 15 million but also higher usage. Matt Bennett of AgMarket.Net says the old crop corn market gave signals of the tighter supply.
“The whole system coming into harvest, I mean, most of these end users most elevators they have very little corn, if any on hand. June quarterly stocks was a bullish surprise. June quarterly stocks. I’d said several times. The only way it could be a bullish surprise with demand where it’s been, especially export demand, is that last year’s crop gets adjusted lower, and that’s what we had today. No surprise to me.”
USDA also lowered soybean production by 6 million bushels but still ended up with a 268-million-bushel carryout which was above expectations and 18 million above old crop ending stocks. Bennett thinks last year’s corn and even soybean production may still be too high.
“I think given demand and what not and seeing where stocks come in. It’s really hard for me to think that that crop wasn’t maybe overestimated a little more, but regardless, I mean, that’s the final numbers for now. For me, carry out is still coming in is a little bit more robust than maybe a lot of folks thought several months ago.”
Wheat stored in all positions on September 1 was slightly higher than expected but production in the Small Grains Summary was bearish with an increase in all wheat at 1.8 billion bushels. Much of that came from the other spring wheat category at 505 million bushels which was nearly 60 million bushels higher than expectations and the previous estimate.
