MN Broker Agrees USDA Stocks Report Unprecedented

Thursday morning at 11:00 the USDA released the September Grain Stocks Report. Saying is was shocking bearish would be an understatement. Reading analysts thoughts about the report, the word unprecedented was used many times. Gordy Kralovetz broker with Chiodo Commodities agrees. I thought the USDA Quarterly Grain Stocks reports were a survey report. Another words, the USDA calls elevators, commercial elevators and exporters, farmers and asks how many bushels of corn and beans they have in inventory.

Apparently instead the USDA just went back and decided the 2020 bean crop was larger they thought and found another 100 million bushel of beans. That of course was then added to the bean stocks and the final carryout for the 2020 marketing year. Those 100 million bushels were then added into the balance sheet as we began the 2021 marketing year October 1, 2021. The end result was we took beans down around 40 cents a bushel.

Gordy's point about what the cash market and basis levels around the Midwest indicate seems valid! Why would basis levels during harvest be much tighter than normal or even a positive basis if all those bushels of grain were actually there? Click on the link and listen to Gordy discuss the USDA Stocks Report and market action last week.