Photo by Melissa Askew on Unsplash
 

Today’s higher-than-expected final US soybean stocks and a hefty jump in US spring wheat output pressure prices after the USDA’s latest update for quarterly stocks and final Small Grains Report issued today. Today’s final corn stocks were lower than trade expectations and wheat’s Sept 1 stocks were similar to last year’s quarterly levels despite 2023’s larger overall wheat crop. Last year’s US bean crop was shaved by 6 million bu while corn’s 2023 crop was lowered by just 15 million bu today. 

The USDA’s Sept 1 and final 22/23 stocks was 18 million higher than earlier this month and 26 million larger than the trade’s average estimate. Even with the USDA’s slightly smaller crop of 4.27 billion bu and some likely small changes in old-crop demand, the World Board tightened last year’s residual to just 12 million bu, the lowest level since 2012/13 crop year.  Interestingly this stock level is 6 million lower than last year’s carryover into 2022/23.

This month’s dramatic jump in US wheat crop output was led by a 45 million jump in spring wheat’s crop size to 505 million bu.  After a 4 bu drop in this variety’s yield in August, the USDA jumped this crop’s yield back 46 bu, similar to 2022’s yield.  The World Boar also increased its H red and S red crop sizes this month by 16 and 9 million bu each which advanced the US overall crop to 1.812 billion,  a 78 million increase from their August projection.   In a twist, the USDA’s Sept quarterly stock were just 2 million higher than last year’s 1.778 billion bu level.  This projects a hefty 83 million jump in US feed disappearance this past summer to 226 million which is possible with US Plains corn supplies extremely tight and very strong cash prices to reach cattle feed yards.

Corn’s final stocks level for 2022/23 crop year was 91 million bu lower than the USDA’s forecast of early this month at 1.362 billion bu.  Despite this smaller carryover level, corn’s price was pressured on spillover selling from the two other major pits.  The World Board did lower 2022’s US corn size by 15 million bu , but the USDA  seems to comfortable with raising this past year’s corn feeding level to 5.5 billion vs lower last year’s crop to have their latest US ending stocks to match their quarterly stocks level.  

The big unknown if the US Congress will pass either a stop-gap or general budget bill before their Oct 1 deadline likely added to the price pressure today. In the past, weekly export shipments were announced on Monday’, but no crop ratings and progress levels were updated and no weekly export sales were issued on Thursdays.  No official USDA notice has been made on what will be announced and what won’t.  Energy and FAS reports will also be impacted.  Back in the 2019 budget issue, China was a big buyer of US corn and beans.  However, a rumor surfaced that they have been a hefty buyer of Ukrainian corn which could take them out of the US market. 

Overall,  producers aren’t likely to be sellers, but next week’s warm and clear weather for the Central US will increase harvest activity.  This will provide more info about 2023’s yields and crop size which has remained variable so far this harvest.  It seems that the budget deal will to pass by late next week for the USDA to issue their Oct crop production report on Oct 12 or it will be delayed. 

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