SOYBEANS:
US soybean stocks on September 1st came in at 268 million bushels versus an average trade expectation of 244 billion and a range of expectations from 216 to 270. September 1, 2022 stocks were 274 million.

PRICE OUTLOOK: Soybean stocks came in 26 million bushels above the average expectation and right at the top of the range of guesses. On-farm stocks were 72 million bushels, slightly higher than last year's 63 million, and off-farm stocks were 196 million bushels, well below last year's number of 274 million. As expected, this year's poor export program likely had to do with the higher-than-expected stocks number, due to USDA's difficulties counting bushels in transit. USDA also adjusted the 2022 soybean production number down to 4.270 billion bushels from 4.276 billion last month. Prices reacted very bearishly to the higher stocks and fell through key support of $12.82 on November futures and targeting $12.50. With the report in the rearview mirror, South American weather will be of key importance.

CORN:
US corn stocks on September 1st came in at 1.361 billion bushels versus an average trade expectation of 1.439 billion and a range of expectations from 1.320 to 1.506 billion. Last year, September 1st stocks were 1.377 billion.

PRICE OUTLOOK: Corn stocks came in below guesses and at the lower end of the range of estimates. On-farm stocks were 605 million bushels, well above last year's number of 510 million. Off-farm stocks were 756 million bushels, well down from last year's 867 million. It appears farmers have decided to store more corn over the last few months. USDA also adjusted last year's corn production to 13.716 billion bushels, down from the August number of 13.730 billion. Although the report was on the surface friendly, pressure coming from the other grains pulled corn prices lower. Now that the report is behind us, US harvest and South American weather will be the market's main focus.

WHEAT:
The USDA grain stocks report showed US wheat stocks on September 1st at 1.780 billion bushels versus an average trade expectation of 1.770 billion and a range of expectations from 1.694 to 1.852 billion. Last year, September 1st stocks were 1.778 billion. The Small Grains report put US all wheat production for 2023/24 at 1.812 billion bushels versus an average expectation of 1.732 billion (range 1.689-1.757 billion). This is up from the August estimate of 1.734 billion. All winter wheat production came in at 1.248 billion bushels versus 1.226 billion expected (range 1.207-1.245). This was up from 1.227 billion in August. Hard red winter wheat production was 601 million versus 584 million expected (range 570-595). Soft red production was 449 million versus 440 million expected (range 425-450). White winter wheat production was 198 million versus 202 million expected (range 196-212). Other spring wheat production was 505 million versus 448 million expected (range 425-467). Durum production was 59 million versus 57 million expected (range 54-63).

PRICE OUTLOOK: Wheat stocks came in just above guesses, and we would consider the numbers neutral, but the production numbers were bearish. On-farm stocks were 598 million bushels, up just slightly from last September. Off-farm stocks were 1.18 billion bushels and slightly down from a year ago. All wheat and all winter wheat production were higher than expected and above the highest guesses. Hard red and soft red wheat were also above the highest guesses, which confirmed reports of better yields in the Plains and eastern soft wheat areas, even after the dry mid-season weather. Spring wheat production was also raised more than expected and was well above its highest guess. Now we know why wheat prices have been so extraordinarily weak lately, as production in just about every category was higher than expected. New contract lows were seen today in Chicago, Minneapolis, and Kansas City wheat, and given the fading export paces, this report revives the bearish outlook.

This full-text report, issued four times yearly, contains stocks of all wheat, durum wheat, corn, sorghum, oats, barley, soybeans, flaxseed, canola, rapeseed, rye, sunflower, safflower, mustard seed, by States and U.S. and by position (on-farm or off-farm storage); includes number and capacity of off-farm storage facilities and capacity of on-farm storage facilities. The data is obtained via an off and on-farm stocks survey, the on-farm survey is a probability survey of farm operators, the off-farm stocks survey is enumerates the volume of grain in all known commercial grain storage facilities.

Unlike the WASDE and other USDA reports, this report measures actual (counted) supply, not estimates or forecasts. It helps verify or correct the estimates in other the USDA reports, such as WASDE.

September is the most closely watched of the four quarterly reports, as it measures stock levels at the end of the marketing year for corn and soybeans. This number should equal the ending stocks number in the monthly Supply/Demand (WASDE) reports. If the September Grain Stocks number is different from the recent WASDE report, the next WASDE report will show an adjustment in supply and demand data to bring the numbers in line with each other. For example, if the WASDE reports have been calling for corn ending stocks to come in at 2.000 billion bushels and the September Grain Stocks report shows September 1 corn stocks at 1.892 billion, it would mean that actual supplies are smaller than projected. This would be a bullish surprise for the market, and we would expect the upcoming October WASDE report to reflect the new estimate.

The January, March and June stocks can also inform the rate of demand as the marketing year progresses.

The marketing year for wheat ends on May 31, and as such, the June Grain Stocks report is the most important for the wheat market.