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Morning Market Review for Sept. 30, 2020

USDA September 1 Quarterly Stocks Report Preview. (Comments are updated by 7:30 a.m. Central Time.)

Will the ghosts of residual adjustments past haunt 2019/20 grain stocks?

  • Corn down 1-2 cents
  • Soybeans down 2-4 cents, soyoil down $0.35/lb, soybean meal up $0.3/ton
  • Wheat up 7-8 cents

*Prices as of 6:55 am CDT.

Happy Quarterly Stocks report day!

Ending stock estimates for corn and soybeans in the 2019/20 marketing year will be released by USDA today. Current trade estimates are optimistic, likely favoring smaller 2020 harvest projections over diminished demand in the face of the pandemic. But there are several factors trade estimate could be ignoring that could result in lower prices after USDA releases today’s report.

U.S. Quarterly Stocks

million bushels

USDA September 1, 2020

Average Trade Guess

Range of Trade

USDA September 1, 2019

USDA June 1, 2020




2,120 - 2,574






490 - 608






2,150 -2,380



Source: USDA NASS, Reuters

Average trade estimates for quarterly corn stocks are projected very close to USDA’s September WASDE total of 2.253 billion. Soybean estimates are just shy of USDA’s current 575-million-bushel mark for 2019/20 ending stocks. But the historical likelihood of USDA matching analysts’ estimates is low – at best.

Growers have enjoyed a profitable rally in the grains complex over the past month and a half – an unseasonal rally given pressure from growing harvest supplies.

Will the ghosts of past WASDE adjustments come back to haunt ending grain stocks for 2019/20? USDA made an uncharacteristic decrease to 2018/19 feed and residual use in January of this year by 186 million bushels, followed by a 128-million-bushel increase in feed and residual use in April.

Combined with a 439-million-bushel – or  3% - decrease in 2019/20 corn demand between the March 2020 and September 2020 WASDE reports due in large part to anemic ethanol demand amidst the pandemic, the adjustments suggest a higher likelihood of today’s corn estimate coming in on the higher end of analyst estimates.

Similarly, USDA added 46 million bushels of negative residual use to 2019/20 soybean stocks in July – later adjusted to 45 million bushels in the September WASDE report – suggesting 2019 production forecasts may have been underestimated. While soybean demand did not take the domestic demand hit that corn suffered amid the pandemic, 2019/20 export demand has decreased by 95 million bushels to 1.68 billion bushels since August 2019, due in large part to diminished demand from China.

Managed money funds are currently net long on corn by 95,912 contracts following six weeks of short trimming by the speculators due to inflation concerns. Similarly, the funds are long on soybeans to the tune of 211,143 contracts. If stocks come in higher than expected, managed money is in a strong position to trigger a selloff, which would likely erode price gains in the grain complex from the last month and a half.

Corn price reaction - 1 day after quarterly stocks report - September

Looking to historical price reactions, price volatility has increased in the past 12 years following the September 30 quarterly stocks report for corn. In the past 32 years of the September 1 Quarterly Stocks report, the nearby active futures price has decreased 20 times (62.5%) in the day following the report’s issue.

Soybean price reaction - one day after quarterly stocks report - September

Soybean prices have also seen an uptick in price volatility following the report’s release over the past two decades. But prices have decreased more often following the report than they have increased – 21 times (61.7%) in the past 34 years.

One thing remains certain regardless of the results from today’s reports – it could shape up to be a wild day in the markets today.

U.S. 2020-21 Wheat Production

million bushels

USDA September 30

Average Trade Guess

Range of Trade

USDA August

All Wheat



1,823 - 1,920


Winter Wheat



1,187 - 1,244


Hard Red Winter Wheat



684 - 729


Soft Red Winter Wheat



267 - 281


White Winter Wheat



223 - 234


Other Spring Wheat



568 - 590


Durum Wheat



51 - 68


Source: USDA Office of the Chief Economist, Reuters

Wheat production for 2020/21 is expected to remain largely unchanged from USDA’s August estimates. The highest chances of variability could be seen in potential adjustments to hard red spring and hard red winter wheat production estimates. As of last Friday, hard red spring wheat harvest in the Northern Plains was largely complete while durum harvests are expected to finish up in the next several days.

Quote of the Day: Eastern Corn Belt farmers are in the early phases of harvesting. An Ohio Feedback from the Field farmer admired yields, noting they are the, “highest I have ever seen on the yield monitor. We are averaging 21% moisture and 240+bpa on crops planted in April and rains that hit right on 113-day corn.”

Soybean harvest continues at a strong pace. Another Ohio farmer reported “50 to 65 bpa so far,” on soybeans. A Northern Illinois farmer also “made 95% of APH yields.”

How is harvest going on your farm? Click here to share your crop updates via a short survey. Results are updated daily in our interactive map so you can stay in the loop on harvest development across the country.


Corn futures fell on harvest pressures and concerns ahead of today’s Quarterly Stocks report from USDA. December corn futures fell $0.0175/bushel to $3.63. March futures also edged $0.0175/bushel lower to $3.7225.

After hitting its lowest mark in 12 weeks in last week’s weekly Petroleum Inventory Status report from the U.S. Energy Information Administration, ethanol production for the week ending September 25 will fight to claw back its post-collapse gains. Weekly ethanol production dropped 2.4% to 38.1 million gallons/day in last week’s report.

That translates to a mere 98.7 million bushels of corn consumed during the reporting week, a far cry from the 112 million – 119-million-bushel range production had been at in the weeks leading up to pandemic-related slowdowns.

As gasoline demand continues to linger in the 352.4 million gallons/day to 384.8 million gallons/day range – about 5.5% - 13.5% lower than pre-pandemic levels – ethanol will likely continue to struggle to break past the 38.1 million – 40.2 million gallon/day range that production has been stuck in since early July.


Soybean prices eased this morning on harvest pressure and easing Chinese demand. Chinese purchases are likely to slow in the week ahead as the country takes a week-long holiday. November soybean futures dipped $0.025/bushel lower to $9.905. October soyoil futures lost $0.35/lb to $32.52.

October soymeal futures added $0.3/ton to $327.60, though shrinking crush margins sent deferred soymeal contracts lower in overnight trade.

The U.S. Energy Information Administration will also release biodiesel production data this morning for July. June 2020 production fell 1 million gallons from the previous month to 151 million gallons. But increased freight traffic due in large part to increased numbers of at-home package deliveries in the pandemic era could help support an overall increase in biodiesel production in July 2020.

Germany is finding more African swine fever (ASF) cases in wild boars in the eastern region. About 38 wild boars infected with the disease have been found since September 10, threatening the herd health of the European Union’s largest pork producer and leading several countries – notably China – to enforce a temporary ban on German pork imports.



Price Change*


Chicago SRW – December Futures



Kansas City HRW – December Futures



Minneapolis HRS – December Futures




Planting concerns in Ukraine and Russia offset a stronger dollar in the wheat complex this morning. The ICE Dollar Index rose 0.22% in overnight trading to $94.130.

Cash sales were slow yesterday as farmers await results from today’s USDA reports on wheat production and quarterly stocks.

Ukraine farmers continue to delay planting progress amid dry soil conditions following a severe drought that began this past spring. In fact, it is the slowest sowing progress the Black Sea country has seen in the past 10 years, according to ag consultancy APK-Inform. Ukraine is expected to plant 1.5 million fewer acres of wheat, totaling 15.1 million acres, this year due to the drought.

As of Monday, only 25%, or 3.7 million acres, of Ukraine’s winter wheat crop had been planted, compared with 7.2 million acres the same time a year ago. A late planting season threatens 2021 wheat yields if the plants are not developed in enough time before cold weather sets in. Ukraine is the sixth largest exporter of wheat in the world.

Russia stands to take advantage of Ukraine’s reduced yield potential. The Russian agriculture ministry released updated 2020 wheat production estimates overnight. Russia increased their wheat crop by 257.2 million bushels to 3.013 billion bushels. The increased supply estimate could relieve some Russian price pressure, as farmers have been slow to book cash wheat sales this fall. Russia is the world’s largest exporter of wheat.


Showers will hover over the Great Lakes region today and tomorrow, according to NOAA’s short-range forecasts. Total accumulation is expected to be light, with NOAA 24-hour precipitation monitors indicating no more than a half inch of total rainfall. The rain is expected to clear out of the region by Friday afternoon. Clear skies in the rest of the country should allow harvest and winter wheat planting activities to continue unhindered today.


Coronavirus cases in the U.S. rose to by 41,199 from yesterday to 7,191,349 cases as of this morning according to the Johns Hopkins Coronavirus Resource Center. The death toll increased by 914 lives to 206,005 deaths as of press time.

“We have taught our employees not to think,” a dairy farmer shared with Tim Schaefer recently. This mentality can create careless problems and tricky relationship dynamics between owners and employees. What is the best way to put an end to this mentality? Check out Schaefer’s recent Transitions and Strategies column for more insights.

Disney laid off 28,000 furloughed park workers yesterday in a move that continued to send reverberations through the market this morning on increased concerns over rising global coronavirus cases. Markets were also less than impressed with last night’s contentious presidential debate. S&P 500 futures fell 0.54% to $3,315.75.

Chinese stock markets edged lower overnight on increased economic uncertainty surrounding the pandemic despite an increase in factory activity. Beginning today, Chinese markets will be closed for a week due to the annual Mid-Autumn Festival and National Day holiday.

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