When the USDA released its Ending Grain Stocks and 2023 Small Grain Summary reports on Friday afternoon, there was a surprise in the total wheat production numbers that led to a significant drop later in the day in the price of wheat futures.
“It was a bit of a shocker in wheat. The all-wheat crop was increased 80 million bushel from what it was in August—that was the last update from USDA,” said Brian Basting, Commodity Research Analyst with Advance Trading, Inc.
“USDA concluded that we really saw a much larger than expected crop relative to trade expectations at 1.812 billion bushels versus the average trade estimate of 1.732 billion bushels. They’re looking at some wheat searching for demand at this point in the crop year,” said Basting.
The 1.812 billion bushels estimated for total U.S. wheat production represent a ten percent increase from last year’s total of 1.65 billion bushels.
The harvested area totaled 37.3 million acres, up five percent from the previous year. The U.S. yield was estimated at 48.6 bushels an acre, 2.1 bushels higher than in the prior year.
The levels of production and changes from 2022 by type were winter wheat, at 1.25 billion bushels, was up 13 percent from last year. Other spring wheat totaled 505 million bushels, up five percent, and Durum wheat production hit 59.3 million bushels, seven percent lower than the previous year.
Oat production was estimated at 57 million bushels, one percent lower than 2022 totals. USDA estimated the yield at 68.6 bushels an acre, 3.8 bushels higher than the previous year. Barley production hit 185 million bushels; six percent higher than in 2022, and yield was 72.4 bushels an acre.
Meanwhile, the USDA’s Ending Grain Stocks report that showed lower numbers for corn and soybeans. Old crop corn stocks on hand as of September 1 totaled 1.36 billion bushels, one percent lower than the same time last year. Old crop soybeans stored in all positions were down two percent from September 1, 2022, and all wheat stocks were up slightly from a year earlier. Of the total corn stocks, 605 million bushels were stored on farms, 19 percent higher than last year. Old crop soybeans stored in all positions on September 1, 2023, totaled 268 million bushels, two percent lower than last year. Soybean stocks stored on farms totaled 72 million bushels, up 14 percent from a year ago.
All wheat stored in all positions on September 1 totaled 1.78 billion bushels, up slightly from September 1, 2022. On-farm stocks were one percent higher than in 2022.
The data from the report led to significantly lower prices across the board in the grain markets. At the end of the trading session on Friday, the December corn contract was 11 ¾ cents lower at $4.76 ¾. November soybeans lost 25 ½ cents per bushel at $12.75. However, the biggest fall was for wheat futures, which saw the December contract drop 37 ¼ cents to $5.41 ½ a bushel.
Click below to hear Brian Basting with Advance Trading and his analysis of the grain markets following the release of the USDA reports on Friday, Sept. 29.
