Post-report rally presents marketing opportunity

October 3, 2024 | Kriss Nelson

The quarterly grain stocks report released by the United States Department of Agriculture (USDA) earlier this week reveals soybean and corn stocks are up 29% from Sept. 2023. With these estimates, the 2023-2024 crop numbers are now finalized with only slight revisions.

The USDA has revised down the 2023 soybean production by 2.62 million bushels from the previous estimate. The planted area remains unchanged at 83.6 million acres, but the harvested area has been revised lower to 82.3 million acres. The previous estimate remains unchanged with the 2023 yield at 50.6 bushels per acre.

Nick Repke, commodities broker for Kluis Commodity Advisors, considers the Sept. 30 quarterly grain stocks numbers slightly bullish for soybeans and while neutral for wheat.

Old crop soybean stock estimates came in at 342 million bushels, under market expectations of 349 million bushels.

USDA projects soybean stocks stored on farms totaled 111 million bushels, up 54% from a year ago. Off-farm stocks, at 231 million bushels, are up 20% from last September.

Old crop corn stocks were bullish, with an estimated stock of 1.76 billion bushels, which was under the market expectations of 1.85 billion bushels.

According to Repke, the market responded positively to the report, reaching price highs unseen in four months.

“We are closing at some of the highest levels on corn since June 30, and soybeans are at some of the highest levels since the middle of July,” he says.

Soybeans and corn traded up a dime from Monday’s report into Tuesday from $10.50 to $10.60 a bushel and $4.20 to $4.30, respectively.

The market’s response results from both the stocks report and the planting delays in South America caused by hot and dry conditions.

“Use this harvest rally to pay down debt, to move bushels that need to be moved that you cannot store and free up some cash flow,” says Repke. “This is the biggest rally we have seen in three months and I recommend using it to give your farm a bit of support.”

Black Swans

The expansion of the Middle East conflict, with Iran’s missile attack on Israel, and the upcoming elections could affect commodity markets.

“Those are two black swans that could affect grain markets and we are unsure of the direction the markets could take as a result,” says Repke.

---

Back