US wheat and corn futures pushed higher on Friday night after the USDA quarterly stocks report through up some interesting numbers. Corn stocks were lower than expected pushing corn futures. Wheat saw a good rally in futures but this wasn’t on the back of stocks being vastly different to trade expectations prior to the report, it was due to the decrease in the 2022 US wheat production number.
All grades were lower bar the white wheat number. All wheat production was lower, the trade was expecting to see about 1mt peeled off the August estimate but the USDA carved about 4mt off their estimate. This took the trade by surprise and spurred the futures market to life on Friday. A little profit taking was evident in last night’s session as the trade comes to terms with whether to believe this number or not.
The reasoning behind the adjustments was the availability of data from the Farm Services Agency that handle the prevent plant insurance and failed crop claim data. Just goes to show how slow this animal moves. Most punters had these reductions factored in weeks if not months ago. Thus it begs the question why the big reaction, I can only guess most computer trading models have never seen a wheat crop, rubbish in rubbish out.
The adjustments to the US spring wheat crop area does also raise the question about the viability of StatsCanada spring wheat data. There’s been a big difference between StatsCan and SaskAg data for a while now. Will we also see a reduction in Canadian production in coming weeks.

Just to muddy the water even further there is now media reports worrying about the possible failure of some major European financial institutions. The numbers involved make 2008 default numbers look small. October, as usual, could be interesting for many reasons. 2022, looked at 2019 to 2021 and quietly said “hold my beer”.