Market Insider

Taking Stock of Reports

This week’s grain markets were largely influenced by that was happening in currency markets and government reports. This week I dug into some of the Statistics Canada reports and it was a bit disappointing to see the agency isn’t very good at production estimates (at least compared to their track record of revisions). This week’s reports were highlighted by the USDA’s stocks and small grains numbers on Friday, September 29th. The latter is a once-per-year statement on American production of wheat, barley, oats, and rye. Overall, the reports were mainly bullish for corn and soybeans but weighed negatively on wheat.

The USDA said that corn inventories as of September 1st would be a 30 year high. To start the 2017/18 marketing year, there is estimated to be nearly 2.3 Billion bushels. This was about 55 million bushels below the pre-report estimate from traders. It is, however, about 32% higher than where we started the 2016/17 marketing year. For soybeans, the USDA says that 2017/18 will start with 301 million bushels of soybeans in America. That’s up 53% from last year’s carryover but it is 38 million bushels below the pre-report estimate.

Where things got a little negative was in the wheat numbers. Total American wheat inventories to carryover from 2016/17 to 2017/18 will sit at 2.253 Billion bushels. This was about 33 million bushels (or about 900,000 MT if you were using above what the market was expecting. Digging into the small grains report, American spring wheat production actually got bigger (somehow). 416 million bushels was suggested by the USDA but the market was expecting 389 million bushels. This is why, despite the American spring wheat production number still being more than 15% less than the 2016 harvest, Minneapolis spring what prices dropped hard. For durum wheat, American output is down 47% year-over-year to just 55 million bushels (or just under 1.5 million tonnes). The market was expecting 55 million bushels. Moving forward, we’re still cognizant of the USDA’s report in December of how many wheat acres didn’t get harvested in the Northern Plains, but baled instead. 

In the past week, the Canadian Loonie lost just over 1% which helped support most cash grain prices across Western Canada. Canola and pulses like yellow peas seemed to be the outliers as those markets were pressured by harvest sales. Wheat prices improved a bit, led by spring wheat. As per the cash grain price info website,, spring wheat prices for spot movement gained an average of 5.5% across the Canadian Prairies in the past week (Sidenote: PDQ data collected was before the bearish stocks and production report from the USDA).

CPS wheat was next with nearly prices up nearly 2.3% compared to a week ago. Durum also gained a few pennies but not too significantly. At FarmLead, we continue to be sellers of feed grains, winter cereals, milling oats, and yellow peas. Conversely, we’re holding onto oilseeds and higher quality wheats. On the latter, we continue to strongly recommend getting your wheat tested for important quality parameters like protein, moisture, HVK, Falling Number, and vomitoxin or DON levels. Get your wheat tested by any of FarmLead’s independent partner labs on today.

To growth,

Brennan Turner
President & CEO |