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What will happen to grain stocks and the stocks-to-use ratio in next week's WASDE report?

Watch for these things in the Oct. 12 report.

The overall supply situation for grains continues to be a friendly story heading into 2023 due to lower production of grain this summer from the intense heat. While supplies remain tight, questions circle regarding demand. Will demand decrease due to high prices, or will demand decrease due to global economic woes?

With the bullish information released for corn and wheat in the recent Quarterly Stocks report, traders now will be looking ahead to the USDA’s World Agricultural Supply and Demand Estimates report released Oct.12. Many traders will be eager to see if there are any adjustments made to yield or demand.

What to watch for in the October report

The October report will be watched by the world. After all, the nine grain and oilseed commodities with tight ending stocks that I talked about last year at this time are still historically tight. The hot U.S. summer weighed on yield potential and is keeping not only U.S. supplies of grain snug, but global supplies as well.

On the Oct. 12 report, traders will first watch the yield numbers released by the USDA. Are they higher or lower than trade expectations, and by how much? Next, traders will focus on total supply and changes to demand, and how that equates to ending stocks.

Evaluating ending stocks is a way to quickly measure how much supply is left over, or expected to be left over, after any crop year. If the perception is ending stocks are getting larger, that usually leads to commodity prices falling lower. If the perception is ending stocks are getting smaller,  that usually contributes to an increase in commodity prices. Taking the significance of ending stocks one step further is understanding the importance of the “stocks-to-use ratio.”

How to calculate the ending stocks-to-use percentage and its importance

When you compare both the ending stock and the stocks-to-use ratio against previous years, this percentage is a fantastic indicator of whether current ending stock levels are at historically small amounts (and justification for higher prices) or plentiful amounts (often times when prices move lower). To calculate the stocks-to-use ratio, take the ending stock number, and then divide that by the total demand usage number (provided on the USDA report), which can then be articulated as a percentage.

Currently the stocks-to-use ratio for new crop corn and soybeans is significantly tight, which justifies the overall high prices the market currently has at harvest. As of the September USDA WASDE report, the current ending stocks for soybeans for the 2022-2023 crop year is pegged at 200 million bushels, with a stocks-to-use ratio of 4.5%.

Corn ending stocks for the 2022-2023 crop year are at 1.219 billion bushels, with a stocks-to-use ratio of 8.5%. All wheat ending stocks for the U.S. are currently placed at 610 million bushels, which is down substantially. All wheat ending stock supplies are cut in half from just a few years ago. However, the stocks-to-use ratio for all wheat is at a modest 31.4%.

The October report will be of utmost importance to know where new crop ending stocks will be, and how that correlates into stocks to use. This will set the tone for the rest of 2022. And it also sets the stage for the “fight for acres” that will likely unfold in 2023.

When market scenario planning, it is essential to be aware of the possibilities that prices can work either higher or lower. Be ready to capture opportunities and minimize price risks. Having a fundamental understanding of supplies, demand, ending stocks, and the stocks-to-use ratio empowers you to make better marketing decisions for the current year and beyond. It also allows you to think outside the box at possibilities in the future. As you know, having the upper hand on possible price scenarios allows you to have more consistent marketing, thus keeping your farm on top.

If you have questions, you can reach Naomi at or visit

Disclaimer: The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Individuals acting on this information are responsible for their own actions. Commodity trading may not be suitable for all recipients of this report. Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. No representation is being made that scenario planning, strategy or discipline will guarantee success or profits. Any decisions you may make to buy, sell, or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing. Total Farm Marketing and TFM refer to Stewart-Peterson Group Inc., Stewart-Peterson Inc., and SP Risk Services LLC. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services, LLC is an insurance agency and an equal opportunity provider. Stewart-Peterson Inc. is a publishing company. A customer may have relationships with all three companies. SP Risk Services LLC and Stewart-Peterson Inc. are wholly owned by Stewart-Peterson Group Inc. unless otherwise noted, services referenced are services of Stewart-Peterson Group Inc. Presented for solicitation

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