PF Reaction: Soybean stocks the surprise this time around

Market reaction

Ahead of USDA's reports, corn futures were trading mostly 7 to 8 cents higher, soybean were around 3 cents higher and wheat futures were mostly 8 to 10 cents higher.

In reaction to the report data, corn futures are trading mostly 6 cents lower, while soybeans have dived roughly 30 cents. Winter wheat futures have extended early gains to 13 to 17 cents, while spring wheat futures are around a dime higher.

Sept. 1 Grain Stocks

Corn: 1.236 billion bu.; trade expected 1.155 billion bu.
— compares to 4.110 billion bu. on June 1; 1.919 billion bu. on Sept. 1, 2020

Beans: 256 million bu., trade expected 174 million bu.
— compares to 769 million bu. on June 1; 525 million bu. on Sept. 1, 2020

Wheat: 1.780 billion bu.; trade expected 1.852 billion bu.
— compares to 845 million bu. on June 1; 2.158 billion bu. on Sept. 1, 2020

USDA’s Grain Stocks Report has a history of providing surprises and this quarter’s report did just that. But instead of corn that is normally the market-mover, it was Sept. 1 soybean stocks that provided the biggest surprise this time.

Sept. 1 corn stocks totaled 1.24 billion bu., down 36% from last year, but 81 million bu. higher than traders expected. Of the total, 395 million bu. (31.9%) of corn stocks were held on-farm, down 47% from last year. Off-farm stocks totaled 842 million bu. (68.1%), down 28% from last year. Fourth quarter 2020-21 indicated disappearance at 2.87 billion bu. fell 6.8% compared with the same period last year.

USDA revised down its 2020 corn crop by 71 million bu. from its previous estimate. It revised last year’s harvested acres to 82.3 million acres, down 200,000 acres, and cut the 2020 yield by 0.6 bu. to 171.4 bu. per acre.

Sept. 1 soybean stocks totaled 256 million bu., down 51.2% from last year, but 82 million bu. higher than traders expected. On-farm stocks totaled 68 million bu. (26.6%), down 52% from last year. Off-farm stocks totaled 188 million bu. (73.4%), down 51% from last year. Indicated disappearance for June through August 2021 totaled 513 million bu., down 40% from the same period a year earlier.

USDA revised up its 2020 soybean crop by 81 million bu. from its previous estimate. It raised harvested acres by 300,000 to 82.6 million acres and increased the yield by 0.8 bu. to 51.0 bu. per acre.

Sept. 1 wheat stocks totaled 1.78 billion bu., down 17.5% from last year. Of the total, 419 million bu. (23.6%) was stored on-farm, down 41% from last year. Off-farm stocks totaled 1.36 billion bu. (76.4%), down 6% from last year. Implied disappearance in the first quarter of 2021-22 was 711 million bu., up 2% from the same quarter last year.

Annual Small Grains Summary

All wheat: 1.646 billion bu.; trade expected 1.680 billion bu.
— compares to 1.697 billion bu. in August

All winter wheat: 1.277 billion bu.; trade expected 1.321 billion bu.
— compares to 1.319 billion bu. in August

HRW: 749 million bu.; trade expected 780 million bu.
— compares to 777 million bu. in August

SRW: 361 million bu.; trade expected 364 million bu.
— compares to 366 million bu. in August

White winter: 167 million bu.; trade expected 176 million bu.
— compares to 176 million bu. in August

Other spring wheat: 331 million bu.; trade expected 327 million bu.
— compares to 343 million bu. in August

Durum: 37 million bu.; trade expected 34 million bu.
— compares to 35 million bu. in August

USDA cut its final all-wheat production estimate by 51 million bu. from August, with the figure coming in 34 million bu. lower than expected. It cut its winter wheat crop estimate by 42 million bu., with HRW crop down 28 million bu., SRW down 5 million bu. and white winter wheat down 9 million bu. from August. USDA lowered its other spring wheat crop estimate by 12 million bu. and raised the durum crop by 2 million bushels.

USDA cut wheat harvested acreage by 939,000 acres to 37.163 million acres and lowered the national average yield by 0.2 bu. to 44.3 bu. per acre. USDA raised its other spring wheat yield estimate by 2.0 bu. per acre amid the 1.05-million-acre cut to harvested acreage.