PF Reaction: Sept. 1 Corn Stocks Well Below Expectations

Posted on 09/30/2019 11:42 AM

Market reaction

Ahead of USDA's reports, corn futures were trading 1 to 2 cents higher, soybeans were 9 to 13 cents higher, winter wheat futures were 2 to 3 cents lower and spring wheat futures were steady to a penny higher.

In reaction to the reports, corn futures have rallied 4 to 11 cents, soybeans have pushed 13 to 17 cents higher, winter wheat futures are up 3 to 6 cents and spring wheat futures are 1 to 4 cents higher.

 

Sept. 1 Grain Stocks

Corn: 2.114 billion bu.; trade expected 2.428 billion bu.
— compares to 5.202 billion bu. on June 1; 2.140 billion bu. on Sept. 1, 2018
Beans: 913 million bu., trade expected 982 million bu.
— compares to 1.79 billion bu. on June 1; 438 million bu. on Sept. 1, 2018
Wheat: 2.385 billion bu.; trade expected 2.318 billion bu.
— compares to 1.072 billion bu. on June 1; 2.39 billion bu. on Sept. 1, 2018

Old-crop corn stocks at the end of the 2018-19 marketing year are down 1% from year-ago and 314 million bu. below the average pre-report trade estimate. The corn stocks at the end of the marketing year were 184 million bu. below the lowest pre-report trade estimate. Of the total stocks, 753 million bu. are stored on farms, up 22% from a year earlier. Off-farm stocks, at 1.36 billion bu., are down 10% from year-ago. Implied disappearance of corn in the final quarter of the 2018-19 marketing year was 3.09 billion bu., down 2.2% from the same quarter last year.

Old-crop soybean stocks of 913 million bu. are 69 million bu. below the average pre-report trade estimate and 27 million bu. below the lowest pre-report trade estimate. Stocks at the end of the 2018-19 marketing year were up 108% from year-ago.  Soybean stocks stored on farms totaled 265 million bu., up 162% from last year, and off-farm stocks at 648 million bu. are up 92% from last September. Implied disappearance in the final quarter of the 2018-19 marketing year was 870 million bu., up 11% from the same quarter last year.

USDA says it overestimated the 2018 soybean crop by 116 million bushels. Planted acres from 2018 are now put at 89.2 million with harvested acres at 87.6 million, down from 88.11 million in the Annual Production Summary. The 2018 bean yield is put at 50.6 bu. per acre, down a full bushel from the Annual Production Summary. That puts the 2018 bean crop at 4.428 billion bu., down from 4.544 billion bu. in the Annual Production Summary.

All wheat stocks at the end of the first quarter of the 2019-20 marketing year totaled 2.385 billion bushels. That’s 67 million bu. above the average pre-report trade estimate, but within the range of pre-report forecasts. On-farm wheat stocks are estimated at 776 million bu., up 23% from the same time last year. Off-farm stocks at 1.61 billion bu. are down 8% from a year ago. Implied disappearance in the first quarter of the 2019-20 marketing year is 657 million bu., up 11% from the same quarter last year.

Durum wheat stocks in all positions on Sept. 1, 2019 totaled 92.9 million bu. up 3% from year-ago. On-farm stocks at 54.1 million bu. are up 4% from September 1, 2018. Off-farm stocks totaled 38.8 million bu., up 2% from year-ago. The June-August 2019 implied disappearance of 19.8 million bu. is down 14% from the same period last year.

 

Annual Small Grains Summary

All wheat: 1.962 billion bu.; trade expected 1.968 billion bu. 
— compares to 1.980 billion bu. in August
All winter wheat: 1.304 billion bu.; trade expected 1.327 billion bu. 
— compares to 1.326 billion bu. in August
HRW: 833 million bu.; trade expected 841 million bu. 
— compares to 840 million bu. in August
SRW: 239 million bu.; trade expected 256 million bu. 
— compares to 257 million bu. in August
White winter: 232 million bu.; trade expected 229 million bu. 
— compares to 229 million bu. in August
Other spring wheat: 600 million bu.; trade expected 585 million bu.
— compares to 597 million bu. in August
Durum: 58 million bu.; trade expected 56 million bu.
— compares to 57 million bu. in August

USDA’s “final” all-wheat crop estimate was 6 million bu. less than the average pre-report trade estimate and down 18 million bu. from August. USDA cut the winter wheat crop estimate 22 million bu., with the HRW crop down 7 million bu., the SRW crop down 18 million bu. and the white winter crop up 3 million bu. from the previous forecasts. USDA raised its other spring wheat crop estimate 3 million bu., whereas traders expected a 15-million-bu. cut. The durum crop estimate was increased 1 million bu., while traders expected a 1-million-bu. reduction.

USDA’s all-wheat yield at 51.6 bu. per acre was unchanged from its prior estimate. USDA put its final winter wheat yield at 53.6 bu. per acre, up 0.4 bu. from its August estimate. USDA cut its spring wheat yield estimate by 0.9 bu. from August to 48.3 bu. per acre.

USDA cut its all wheat harvested acreage estimate by 353,000 acres from August. Winter wheat harvested acreage was cut 597,000 acres and other spring wheat acres were raised 310,000 acres.

Due to a large portion of spring wheat acreage that was not yet harvested when USDA conducted its survey for this report, the agency will resurvey farmers in Idaho, Minnesota, Montana, North Dakota, South Dakota and Washington. If the data justifies any changes, they will be included in the Nov. 8 Crop Production Report. We anticipate a smaller other spring wheat and durum crop estimates due to adverse late-season weather in the Northern Plains.

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