September 30th Grain Report Recap

USDA ReportsThe USDA released its September 30 Grain Stocks report yesterday, reporting slightly higher bean stocks and less corn, leading corn to fall lower and beans to end slightly higher, due to the report data of 14 million bushels of beans lower than pre-report expectations.

At yesterday’s close, the December corn futures ended 1 1/4 cents lower at $3.87 ¾, while November soybean futures ended 7 3/4 cents higher at $8.92. Overall, the report showed corn stocks up 15 percent from June of 2014, and soybean stocks up 54 percent. In total, corn stocks were up 41 percent from September of 2014, and soybean stocks were up 108 percent.

Looking specifically at the numbers, old crop corn stocks in all positions as of September 1st, 2015 totaled 1.73 billion bushels. 593 million bushels of total corn stocks are being stored on-farm, up 28 percent from one year ago. Off-farm stocks are at 1.14 billion bushels, a number that is up 48 percent from one year ago. The June-August 2015 quarterly disappearance is at 2.72 billion bushels, compared with 2.62 billion bushels from the same time period last year.

The big news coming from the report stemmed from the soybean numbers.

Of the soybean market’s initial 18 cent rally following the report, and final ending of 8 cents higher for the day, DTN’s senior marketing analyst Darin Newsom argues, “The immediate reaction looked to be one of a market with an artificial ceiling finally removed.”

Old crop soybeans totaled 191 million bushels as of September 1st, a figure up 108 percent from one year ago. On-farm soybean stocks totaled 49.7 million bushels, up 133 percent from a year ago, with off-farm stocks at 142 million bushels, up 101 percent. Disappearance figures totaled 436 million bushels, up 39 percent from last year.

According to the report:

Based on an analysis of end-of-marketing year stock estimates, disappearance data for exports and crushings, and farm program administrative data, the 2014 soybean production is revised to 3.93 billion bushels, down 41.7 million bushels from the previous estimate. Planted area is revised down 425,000 acres to 83.3 million acres, and harvested area is revised down 470,000 acres to 82.6 million acres. The 2014 yield, at 47.5 bushels per acre, is down 0.3 bushel from the previous estimate.

Trade reaction to the release of the latest report numbers was predictable, although Kluis Commodities analyst Cory Bratland expects the numbers to be shrugged off quickly, and for the markets to resume trading based on harvest activity. Average trade guesses were quite similar to actual numbers for corn, even though they were lower than pre-report trade expectations, hence higher close.

Randy Martinson with Progressive Ag Marketing based in Fargo, N.D., does expect to see corn and soybean prices to see pressure due to the quick pace of harvest and higher-than-anticipated yields.

How is your harvest progress? Are you surprised by the latest Grain Stocks Report numbers? Feel free to contact UFARM with any questions or concerns you may have—we are glad to work with you to make the most of your farming operation.  UFARM offers a full range of Nebraska land management services, including real estate sales, rural property appraisals, consultations and crop insurance. UFARM has operated in Nebraska since the early 1930’s. Contact us today!

Sources consulted:  Howard, Fran. “Big Carryouts as Farmers Head Into New Crop Season.” Agweb.com. Farm Journal. 30 Sep. 2015. Web. 01 Oct. 2015.  Newsom, Darin. “We’ve Seen This Show Before.” DTN The Progressive Farmer. DTN. 30 Sep. 2015. Web. 01 Oct. 2015.  USDA. “Grain Stocks Report September 30, 2015.” National Agriculture Statistics Service. United States Department of Agriculture. 30 Sep. 2015. Web. 01 Oct. 2015.