Bearish soybeans and wheat in Sept. 29 stocks report

By Doug Tenney, Leist Mercantile

Soybean stocks were higher than expected, wheat production was higher than expected. Corn stocks lower than expected. Both 2022 corn and soybean production were lowered, corn was down 16 million bushels, soybeans down 6 million bushels.

The report detailed U.S. grain stocks on Sept. 1 as follows: corn 1.36 billion bushels; soybeans 268 million bushels; and wheat 1.78 billion bushels. 2022 corn production 13.714 billion bushels, 2022 soybean production 4.270 billion bushels. Note that today’s numbers will not include supply and demand tables. However, it will include revised estimates for 2022 corn and soybean production.

Following the noon USDA report release, corn was down 5 cents, soybeans cents down 19 cents, and wheat down 20 cents. Prior to the report, corn was down 1 cent, soybeans down 5 cents, and wheat down 2 cents. 

Grains were lower prior to the report on expectations of the government shutdown looking more likely. In addition, clear weather in the Midwest next week should advance corn and soybean harvest activies.

Trader estimates: Corn – 1.429 billion bushels; Soybeans – 242 million bushels; Wheat – 1.772 billion bushels. 2022 US corn production 13.719 billion bushels. 2022 US soybean production billion bushels.

The next WASDE Report is scheduled for Oct. 12. However, if Congress does not pass a spending resolution(s) and or new budget in both the Senate and the House of Representatives before midnight Sept. 30, the looming government shutdown could prevent that report from being released. 

Remember that any kind of shutdown will yield lots of finger pointing from both parties. Hardliner Republicans in the House of Representatives are vehemently opposed to the Senate bipartisan passed stop gap measure. The U.S. House of Representatives consists of Republicans holding 222 seats and the Democrats 213 seats. Bear in mind that any Republican defections from a spending measure of 9 or more, will fail when assuming Democrats are most likely not crossing the aisle to vote yes.

This report is often viewed as a barometer to determine if last year’s corn and soybeans production and yields were estimated correctly. The first and most prominent grain to review will be soybeans. If soybean stocks are significantly higher or lower than the latest WASDE ending stocks of 250 million bushels, that will be a huge tell. Multiple dozens of million bushels away from trader estimates is much more impactful when looking at 250 million bushels of soybeans compared to 1.429 billion bushels of corn.

The USDA Weekly Crop Progress Report this week that the U.S. corn harvest was 15% while the U.S. soybean harvest was 12%. Drilling down to Ohio, the corn harvest was 3% and soybeans were 3%. While Ohio’s harvest is not yet at a full throttle pace, regions of Illinois are making rapid harvest progress as some are already 50% or more done with corn in Illinois.

Talking with folks last week at the Farm Science Review, harvest activity seemed to match projections more than a month ago that the Ohio corn and soybean harvest in many areas could easily be two weeks behind normal. Expect that Ohio corn yields in coming weeks will be in a huge range. One thread commonly heard is that Ohio’s producers are also pleasantly surprised at the corn yields in spite of the lack of summer rainfall across numerous Ohio locations. 

Early harvest activity in Ohio to date has often seen corn yields 160 to 200 bushels per acre while soybean yields have revealed a very pleasant surprise with yields of mid 60s to the mid 70’s often reported. It will take several weeks to determine if the balance of the soybean harvest will yield similar numbers. However, that will not likely take place.  

December CBOT corn continues to be stuck in a tight 30-cent range of $4.69 to $4.99. November CBOT soybeans have seen a huge range the past six weeks of $12.84 to $14.09 as they made that high the last two weeks of August. That price spike gave producers the opportunity to flat price fall delivery soybean at $13.40 or higher in numerous locations around Ohio. 

Expect Ohio’s harvest pace to significantly increase next week. Don’t be surprised to see the lines at Ohio’s grain facilities be longer than those of recent years while as well reaching into November.