It was a busy week for the grain trade, with a number of reports released on Wednesday by the USDA. The major reports were the grain summary, quarterly stocks, winter wheat plantings and the monthly supply/demand report. The trade had expected some negative numbers for soybeans and positive numbers for corn. But USDA delivered very bullish numbers for both.

They lowered soybean yields, which was a big surprise as the trade had expected an increase. They lowered corn yields more than expectations as well, sending both corn and soybean ending stocks back down to extremely low levels. While wheat supplies are in a comfortable range, supplies of milling quality stocks remain very tight.

The bullish numbers just added fuel to what was already a very bullish landscape for the grain complex. It also underscored growing concerns about food supplies and price inflation, with a number of media outlets featuring stories about the crop reports and what the numbers mean to a world that is growing in population but apparently shrinking in food stocks.

No less important was the winter wheat plantings report, which showed a 10% increase in total plantings from last year at 40.99 million acres, still 5% behind just two years ago. Most of the acreage increase came in soft red acres across the Midwest, which saw a jump of 2.5 million acres to 7.76 million, up 47% from last year. Hard red acres were up 1 million acre to 29.6 million, up 4% over last year. White wheat plantings were also 4% higher at 3.66 million acres, up 150,000 acres.

Most of the winter wheat was planted into good conditions and was well established before heading into dormancy. However, the western central plains is well known to have been planted into very dry soils with about half not even germinated before the cold weather settled in. That dry region has also experienced some extreme weather so far this winter with little or no snow cover. Already, some producers there are projecting significant winter kill and bracing for what looks to be a poor crop already. But obviously, Mother Nature will have the last say and good rains in the spring can resurrect a crop, so we’ll see.

Export sales were surprisingly low at 175,000 MT, well below even the low end of trade estimates. It’s not the kind of sales figure we’d expect to see with such tight world supplies and fears of food shortages. China actually announced that they were cancelling plans to import corn because prices were too high. It’s not often that China backs away from buying anything because prices are too high, so it would be advisable to take that announcement with a grain of salt. After all, they’re the primary reason that commodity prices are so high in the first place.