Corn, soybean and wheat stocks above expectations

By Doug Tenney, Leist Mercantile

It was a surprise that all the numbers for grain stocks were above expectations.

The USDA report today is a quarterly grain stocks report published four times a year.

Today the USDA had corn stocks at 2.14 billion bushels, soybeans of 438 million bushels, and wheat at 2.38 billion bushels.

Just ahead of the report, corn was down 1 cent, soybeans up 1 cent, while wheat was down 4 cents. Shortly after the report, corn was down 6 cents, soybeans down 9 cents, while wheat was    down 4 cents.

As of mid-morning for the week, corn was up 7 cents, soybeans up 5 cents, with wheat down 13 cents. Mid-morning for the month, corn was down 1 cent, soybeans up 9 cents, with wheat down 37 cents.

Trader estimates ahead of the noon report had September 1st corn stocks of 2.010 billion bushels, soybean stocks of 401 million bushels, and wheat stocks at 2.343 billion bushels. This compares to last year the September 1, 2017 corn stocks were 2.293 billion bushels, soybeans were 302 million bushels, and wheat 2.266 billion bushels.

Today’s report is a quarterly US grain stocks report. Just a reminder if the numbers are sharply different than trade expectations, it could mean a change in production from last year. Those 2017 production changes would most likely take place with the October Supply and Demand Report on October 11. Note this is not a common occurrence for a production change to take place. Outlined is the process of how it gets done. Sometimes being older does have some advantages.

Weather forecasts are a big deal this time of year. The Midwest has limited rains the next few days with good rains seen for much of the region late next week. Average temperatures are seen through the weekend, above average temperatures for the first half of next week, with below average temperatures for late next week.

Harvest across Ohio is slowly returning following the several inches of rains received earlier this week. Producers across the state are extremely concerned about the stack quality for corn. In many cases the stalk is very weak with any strong winds prior to harvest having the potential to result in lots of downed corn across the field. In isolated cases corn has sprout damage in standing corn fields due to the huge amounts of rain several weeks ago with hurricane Florence followed by multiple days of ninety degrees or more. It was the perfect storm of ideal, incubator conditions that are never desired.

Here is a wire story from this morning you may not have yet seen. Concern about similar soybean damage is already noted in Ohio this past week. Wire story reports a rain-damaged soybean harvest in the U.S. Mississippi Delta is heaping more pain on farmers already suffering from a damaging trade war between the United States and China that has dragged prices to lows not seen in a decade; late-season storms, including bands of showers from Hurricane Florence, soaked ripe soybeans from Memphis, Tennessee, to northern Louisiana over the past two weeks, enhancing mold and fungus growth and causing some beans to rot in their pods; now those soybeans do not meet the market’s crop quality guidelines, so farmers that sold soybeans through forward contracts are facing a penalty because they cannot deliver beans with the quality required, they said.

Both corn and soybeans had a weekly reversal higher with the close last Friday. Many producers likely have not yet grasped the reality of corn prices last night 22 cents above the new contract lows set last week. Nor that soybean prices last night were 42 cents above their new contract lows which were also last week. A monthly reversal higher for corn will take place if the December CBOT corn today closes above $3.65. Likewise the same takes place for November CBOT soybeans if the close today is above $8.43 ½.

Watch the closing settlements for grain prices tonight to see if the monthly reversals mentioned above take place.

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