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Corn and soybeans bullish, wheat negative in stocks report

By Doug Tenney, Leist Mercantile

The USDA report today had September 1st corn stocks at 2.114 billion bushels, soybeans 913 million bushels, and wheat 2.385 billion bushels. Both corn and soybean numbers were below the low end of trader estimates. Shortly after the report corn was up 10 cents, soybeans up 18 cents, and wheat down 1 cent. Just before the noon release corn was up 2 cents, soybeans up 13 cents, and wheat down 3 cents.

Today is the quarterly grain stocks report on US grain as of September 1st. This report will provide both off farm and on farm bushels. Most likely the report will get some attention from traders as it details another report from USDA. Harvest activity is close to a fever pitch this week in Ohio and the rest of the Midwest. With that note, producers may not have this report on their radar. A takeaway for today – If corn and soybean stocks are drastically different from expectations, it hints 2018 corn and soybean yields could be revised in upcoming monthly WASDE reports.

The average trade estimate for corn stocks was 2.428 billion bushels, soybeans 982 million bushels, and wheat 2.318 billion bushels. Last year’s September 1st corn stocks were 2.14 billion bushels, soybeans 438 million bushels, and wheat 2.390 billion bushels. Not unexpected is the huge increase in soybean stocks compared to a year ago.

China will be on holiday this week beginning on Tuesday. The US/China trade talks at this moment are scheduled to begin in Washington DC on October 10. The additional US tariffs on China goods were scheduled to be implemented on October 15. China’s first order of business at the table will be to ask for an extension on the implementation of additional tariffs.

Just remember the country writing the news release is always the hero. The other party is the villain. Things would be so much better “our way” if the “other party could just see clearly,” remains the theme in ongoing statements from both parties.

Soybean price activity last week had the November CBOT contract reach its high for the week last Monday at $8.99 ¼ while the low for the week was on Friday at $8.81 ½. The lowest close last week was on Friday at $8.83, down 5 ½ cents for the day. More promises of rain to come in Brazil partly resulted in the lower close last Friday. The uncertainty of the US/China trade talks also provided tension and uncertainty.

Last week the Trump administration hinted the US could delist China companies on our stock exchanges. Additional news on Sunday indicated this would not take place. The rhetoric is ongoing from both sides. It will continue in the days and weeks ahead until a long term deal beyond just agricultural goods is inked. When you remember the talks later next month are the 13th session for trade negotiators between the US and China to meet, you have to think out loud, “Here we go again.”

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