USDA Reports Preview

I'll say it again, the 2019 U.S. crop season continues to be unlike any other in recent history. While we wait to see how harvest turns out, USDA has a couple of reports for us to consider on Monday, Sept. 30.

The Sept. 1 Grain Stocks Report will establish final ending corn and soybean stocks for the 2018-19 season. For wheat, USDA's wheat stocks estimate will help us compare first-quarter demand with previous years. In the Small Grains Summary, USDA will provide estimates of 2019 wheat production by class at a time when the spring wheat harvest is encountering more difficulty than usual.

Both reports will be released at 11 a.m. CDT.

CORN

USDA's Sept. 12 World Agricultural Supply and Demand Estimate (WASDE) report estimated U.S. ending corn stocks at 2.445 billion bushels (bb) for 2018-19. The ending stocks-to-use ratio of 17% was the highest since 2005-06, inflated by six consecutive years of good weather and big crops. Dow Jones' survey of analysts expects USDA to find 2.436 bb of corn on hand as of Sept. 1, very close to the Sept. 12 estimate. If there is a surprise Monday, the odds lean bearish as corn demand has fallen off in recent months.

SOYBEANS

For U.S. ending soybean stocks, USDA estimated 1.005 bb on Sept. 12, the first billion-bushel surplus ever, equating to a high 25% of annual use. The ending stocks-to-use ratio is second only to 28% in 1985-86, an extremely bearish era that happened long before China had an appetite for soybeans. China's 25% tariff, of course, was the primary reason soybean supplies ballooned so high in 2018-19, and the trade differences have not been settled yet.

Even so, Dow Jones' survey is expecting USDA to find 980 million bushels (mb) of soybeans as of Sept. 1, holding out hope of coming in below the billion-bushel mark. These small adjustments aren't likely to have much price impact Monday, but they do have consequences that carry into 2019-20.

WHEAT

For wheat, USDA's estimate of Sept. 1 wheat stocks will be the main attraction. U.S. wheat exports were up roughly 30% in the first quarter of 2019-20 from a year ago, making it interesting to see how total wheat demand fared in the first quarter compared to other years.

Dow Jones' survey expects USDA to estimate Sept. 1 wheat stocks at 2.318 bb, down from 2.390 bb a year ago. If true, that would put first-quarter wheat use at 869 mb, the highest in six years. Yes, there is still a lot of U.S. wheat available and the outlook for wheat prices is far from bullish, but the stronger-than-expected demand helps provide support at these lower prices.

Also, according to Dow Jones, USDA's Small Grains Summary is expected to show 1.971 bb of U.S. wheat production in 2019, slightly less than the September estimate of 1.980 bb. Winter wheat is expected to account for 1.330 bb, with 844 mb for hard red winter wheat, 256 mb for soft red winter wheat and 229 mb for white winter wheat.

Dow Jones' analysts expect 585 mb of other spring wheat production, but it will be a while before we get a better estimate of that, as the spring wheat harvest continues to encounter difficult harvest conditions. Fifty-six million bushels of Durum wheat production is also expected in Monday's report.

Barring some surprise, Monday's USDA reports are not likely to have much price impact on Monday's grain markets. In the case of corn and soybeans, the numbers are largely a reflection of yesterday's news, but they also establish the new starting points for 2019-20.

With fewer numbers than usual, Monday's webinar is likely to be short and hopefully sweet. Join us for an insightful review by registering at: https://dtn.webex.com/….

QUARTERLY STOCKS (million bushels)
	9/1/19	Avg	High	Low	9/1/18
Corn		2,436	2,511	2,370	2,140
Soybeans		980	1,001	940	438
Wheat		2,318	2,450	2,200	2,390
SMALL GRAINS SUMMARY (million bushels)
2019-2020 Production	9/30/19	Avg	High	Low	2018
All Wheat		1,971	2,011	1,940	1,884
Winter		1,330	1,355	1,312	1,184
HRW		844	860	838	662
SRW		256	265	250	286
White		229	235	225	236
Spring		585	601	560	623
Durum		56	58	50	77

Todd Hultman can be reached at todd.hultman@dtn.com

Follow him on Twitter @ToddHultman1

(AG/BE)

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