Bullish corn, bearish soybeans in U.S. Quarterly Grain Stocks

By Doug Tenney, Leist Mercantile

Today is USDA report day for U.S. Quarterly Grain Stocks. The monthly supply and demand report (WASDE) will not be published today, that report will be on Oct. 12.

Corn stocks were below trade estimates while soybean stocks were 32 million bushels above trade estimates.

The Sept. 1 grain stocks were: corn 1.377 billion bushels, soybeans 274 million bushels, wheat 1.776 billion bushels. 

Average trade estimates for Sept. 1 grain stocks: corn 1.512 billion bushels, soybeans 242 million bushels, and wheat 1.776 billion bushels.  

Just after the noon report release, corn was up 12 cents, soybeans down 18 cents, and wheat up 27 cents. Prior to the reports, corn was up 9 cents, soybeans up 9 cents, and wheat up 15 cents. Earlier this morning at the 8:45 am pause, corn was up 4 cents, soybeans up 6 cents, with wheat up 11 cents. 

The U.S. domestic corn basis has been strong for many weeks as end users were paying more to secure stocks for nearby demands. Some are suggesting this trend may point to the Sept. 1 estimates by USDA of corn stocks could be below the average trade estimate.

Harvest continues to gain steam across the Midwest. Ohio is not yet in full harvest mode as the northern half of the state remains 1-2 weeks away from the frenzied pace of harvest. Corn harvest to date indicates yields are better than expected. Those producers which have harvested corn the past 10 days are expecting their best corn yields for the year to already taken place.  

The weekly U.S. Ethanol Production Report on Wednesday was disappointing with just 85.9 million bushels of corn used for ethanol production. It compares to mid-August which was 100.2 million bushels of corn. The disappointment continued into yesterday with the weekly grain export sales for corn at 20 million bushels. 

Russia’s annexation this week of four Ukraine states raises the potential of the west adding additional Russian sanctions. The annexation prompts further questions as it ups the volatility to the rest of the world. Recent elections were held in Russian held states which are located in eastern Ukraine. Those elections have been called a “sham” as outside monitoring to ensure a fair election was not permitted by Russian authorities. The land grab by Russia has been termed an act of geopolitical piracy this week by various news organizations.  

Field drying will be taking place today in Ohio fields with full sun finally in the picture. At least 3 days this week it was outright cold with the combination of wind and no sun. Corn harvesting south of Columbus has slowed dramatically compared to earlier this week. Some grain facilities were running half drying the past two weeks to stimulate inbound bushels for nearby corn trains. Half drying will end on Saturday in some locations. Some producers have already harvested soybeans which were planted by mid-May. Soybeans yields range from pleasantly surprised to disappointment when yields were just average.

Today is a rare day for grains with week end, month end, and the end of the quarter taking place.

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