Sept. 30 numbers bearish for beans

By Doug Tenney, Leist Mercantile

If you were expecting yield and demand changes for this report, you are in the right church, wrong pew. It will be a wait of days to see those changes. The next USDA WASDE report will be Oct. 12. However, if Congress cannot raise the debt ceiling timely, a U.S. government shutdown in the early days of October will prevent USDA reports from being released according to schedule.   

The USDA report today details quarterly US grain stocks as of Sept. 1. If corn and soybean stocks are vastly different than those detailed with the Sept. 10  WASDE Report, it means the Oct. 12  WASDE report could see changes in the supply and demand tables for those two crops. It also means 2020 production numbers were too higher or too low, with corrections to take place in October.

US grain stocks as of Sept. 1 were: corn 1.24 billion bushels, soybeans 256 million bushels, and wheat stocks 1.78 billion bushels.

Trader estimates for grain stocks were: corn 1.155 billion bushels; soybeans 174 million bushels; and wheat 1.852 billion bushels. Stocks are expected to be below those of last year with this same report. 

Shortly after the noon Eastern Time report release, corn was unchanged, soybean down 19 cents, and wheat up 13 cents. Prior to the report, corn was up 8 cents, soybeans up 3 cents, and wheat up 11 cents. 

Typically the Sept. 30 Grain Stocks Report is a yawner and a non-event. The last three quarterly Grain Stocks Report have yielded higher grain prices. 

Corn and soybeans are seeing price resistance on two fronts. First, is the ongoing harvest of U.S. corn and soybeans with grain moving to town.  Some are expecting the U.S. harvest to be among the fastest in the past 10 years. So far, soybean yields have been above expectations for both Iowa and Illinois. Second, U.S. export sales totals for the current marketing year for corn and soybeans are low for this time of year. The marketing year for both corn and soybeans is from Sept. 1 to Aug. 31. 

China this past week had experienced an energy crunch which is deepening. Inadequate coal supplies are the culprit. Rolling power outages are taking place in at least 20 of China’s 31 provinces. As a result of those outages, factory shutdowns are taking place. Soybean crushing plants have been idled during those rolling power outages. Soybean crushing capacity excess allows the luxury of not yet being concerned when plants are idled. 

Corn production costs are expected to reach an all-time in 2022. This comes as producers have been fearful for months those input costs are exploding higher. Nitrogen costs have more than doubled since last fall. Some producers are already lamenting they are underwater for 2022 as they stepped on the gas months ago, selling corn for crop year 2022 when fall 2022 values reached $4.50.

The US economy continues to provide plenty of uncertainties. U.S. companies are being challenged with higher production costs, labor shortages, and slowing demand.

Harvest progress will continue in the weeks ahead. December CBOT corn has price resistance at $5.50 and $5.66. November CBOT soybeans have price resistance at $13.18. Earlier this morning, December CBOT corn was $5.45, up 6 cents, November CBOT soybeans were $12.90, up 6 cents. 

In spite of excellent harvest weather to date, U.S. farmer selling at harvest is below pipeline needs.  

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