Instant Reaction to the Quarterly Stocks Report and Small Grains Report

It’s the final day of the third quarter.

Which means that the USDA has released the quarterly stocks report and its Small Grains report.

What was everyone expectiong from the data?

But that didn’t come.

There was a strange word that appeared in some corners of the social media sphere.

It’s a new word… one we don’t associate with the U.S.D.A reports.




The markets liked what they heard from the USDA in the corn and soybean complex.

But for wheat farmers?


Let’s start with the quarterly stock numbers…

THIRD QUARTER STOCKS (million bushels)
  9/1/17 Avg 9/1/16 Y-O-Y
Corn 2,295 2,349 1,737 32.1%
Soybeans 301 339 197 52.8%
Wheat 2,253 2,220 2,545 -11.5%


Now… let’s react to the numbers.


Corn Stocks Surge 32 Percent

Hope you like eating corn, because the Americans are now going to be eating it for the rest of our lives. Old crop corn inventories hit a 30-year high.

2016/17 stocks ended at 2.295 billion bushels, enough to fill every bathtub in the country.

This is the largest inventory number since the 1987-88 crop year. But it’s not even close to that year’s record of 4.259 billion bushels

What’s actually surprising, however is that this figure came in lower than analysts had expected. The trade average was 2.346 million bushels, a sign that no one was underestimating just how high the USDA could go.

The range was 2.31 billion to 2.38 billion.

“My corn predictions sure ‘Broke Bad.'”


Looks like everyone overbid…

The number was also a downward revision of the USDA’s expectations from the Sept. 12 WASDE report. That explains, why at 12 p.m., corn prices for the December contract in Chicago popped 4.5 cents.

Soybean Stocks Jumps 53% Y-O-Y

The USDA also reduced its expectations for U.S. soybean stocks, even though the number is still eye-popping.

The agency said that 301 million bushels of soybeans were in storage on Sept 1., a 53% increase from last year.

Still, that future was well below the trade average of 338 million bushels.

Could this be right? Is that what’s happening?

Well, it’s the USDA, so…


The major takeaway is that farmers are absolutely hoarding this stuff as if there might be a zombie apocolypse soon.

“Listen, Carl. We’re going to hold these beans until they’re worth at least $13.00 a bushel… We might be here a while…”


The USDA said that farmers had 87.9 million bushels on farms. That number is a 112% increase from last year.

Also bullish for soybeans was the downward revision of 2016 production estimates. The agency cut the 2016 number by 10.6 million bushels to 4.296 billion bushels It also cut its 2016 yield estimate from 52.1 bushels per acre to 52.0 bushels per acre.

How did the agency justify this?

Through its rigorous “analysis of end-of-marketing year stock estimates, disappearance data for exports and crushing, and farm program administrative data.”


Total Wheat Stocks Down 11 Percent

Wheat inventory levels fell by double-digits over the last year. Total stocks came in at 2.253 billion bushels, an 11% decline from last year.

It’s easy to point out to falling production (mentioned in a minute) for the downturn in stocks. Overall, there was a 33% decline in the amount of storage of wheat on farms (total 489 million bushels.)

Overall, the stocks figure came in higher than analysts were expecting.

December SRW contracts in Chicago and HRW contracts in Kansas City were both off a few cents an hour after the USDA released its numbers.

Still, the real news was in the Small Grains Summary.


Small Grains Report (million bushels)
2017-2018 Production 9/29/17 Avg 2016-17 Y-O-Y
All Wheat 1,741 1,725 2,310 -24.6%
Winter 1,269 1,287 1,713 -25.9%
HRW 750 758 1,082 -30.7%
Spring 416 389 493 -15.6%
SRW 292 306 345 -15.4%
White 227 223 286 -20.6%
Durum 55 50 104 -47.1%


The numbers above didn’t offer much support to the markets. got Jack Scoville on the phone. The PRICE Futures Group’s Senior Market Analyst was surprised by the report. [1]

Two figures really stick out.

“Interesting production report for wheat, winter wheat actually saw a little less production but spring went up,” Scoville says. That’s exactly the opposite of the trade ideas.”

Spring wheat contracts for December were off double digits after the spring wheat number increased and surprised everyone.

Naturally, there are skeptics… particularly in the wake of this summer’s crippling drought that pummeled the northern plains.

Others are holding out hope that new data will prove the wheat bulls have been right all along.

Be sure to check back with us later today as we did more into both reports and insights after the final hour of trading in Chicago.

About the Author
Garrett Baldwin

Garrett Baldwin is a content strategist and editor at FarmLead. He covers the global grain markets and public policy issues related to the agricultural industry. He is a graduate of the Medill School of Journalism at Northwestern University. He also holds a Master’s Degree in Economic Policy from The Johns Hopkins University, an MS in Agricultural Economics from Purdue University, and an MBA in Finance from Indiana University.

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