USDA reports provide mixed bag

MINNEAPOLIS — A pair of U.S. Department of Agriculture crop reports came out recently — one market-friendly and the other with a bit of bear.

Randy Martinson of Martinson Ag Risk Management gave the highs and the lows of the annual small grains summary and quarterly grain stocks reports in a Minneapolis Grain Exchange-hosted conference call Sept. 30.

The annual small grains summary featured some positive numbers for the trade.

“As expected, we did see small grain production lowered a little bit. All wheat production came in at 1.646 billion bushels. That’s down 34 million bushels from expectations and down 51 million from the previous report. That’s a 10% drop from the previous year. Harvested acres were up 1% for all wheat at 37.2 million acres.

“In the all winter wheat category, production was up about 9% from last year at 1.277 billion bushels. It was 44 million less than expected by the trade and 42 million bushels less than the previous report.

“The small grains summary report was friendly and is helping to support the wheat market.”

By contrast, what USDA estimates leaned toward a bearish reaction?

“As far as the quarterly stocks estimate is concerned, that came in a little more bearish. Corn stocks came in at 1.24 billion bushels, 82 million above expectations, but 682 million bushels lower than the previous year.

“Soybean stocks were a whopping 256 million bushels. That was up 82 million bushels from expectations, mainly due to an increase in production. That is down, though, about 269 million bushels from the previous year ... but it was quite a bit higher than expected by the trade and that’s putting some pressure on the soybeans which is spilling over to put pressure on corn.

“Wheat stocks were a little bit less at 1.78 billion bushels because of lower production. That was 72 million bushels less than expected and 378 million lower than the previous year.”

The quarterly stocks estimates also featured production adjustments to the 2020 cop year.

“The 2020 corn was actually a little friendly as planted corn acres were lowered by 167,000 acres to 90.65 million acres. Harvested acres dropped by 154,000 to 82.3 million acres. Yield dropped 0.6 of a bushel to 171.4 bushels per acre which dropped production to 14.11 billion bushels. That’s 71 million bushels lower than the report last month and about 62 million bushels below expectations.

“Just the opposite happened for soybeans. Acres were increased by 270,000 to 83.4 million acres. Harvested acres were increased by 285,000 to 82.6 million. Yield jumped 0.8 bushels to 51 bushels per acre and production jumped by 81 million bushels to 4.22 billion bushels, about 80 million above expectations.

“It was a little bearish on the soybean side. That’s what is putting some pressure on the soybeans.

“Overall, this report was friendly to the small grain side. It’s helping to support the wheat market but the bearish numbers in soybeans are pushing soybeans down and that’s kind of gotten corn in a little tug-of-war between the higher wheat and the lower soybeans.”