The U.S. Department of Agriculture's Quarterly Stocks and Small Grains Summary was bullish for wheat, but bearish for the row crop sector.

The highly anticipated report was expected to decrease wheat production in part because of poor yields in drought-impacted areas, which it did, but the report was not expected to increase soybean stocks as much as it did.

Wheat stocks were bullish compared to last year and also below projections at 1.78 billion bushels. That compares to 2.16 billion bushels last year or an 18% reduction. Plus, all wheat production was lowered to a 19-year low of 1.65 billion bushels, which was below the previous estimate of 1.697 billion bushels and also under expectations.

Winter wheat production was cut as well to 1.28 billion bushels, with hard red winter wheat lowered to 749 million bushels. Spring wheat production also dropped to 331 million bushels, as the agency estimate producers harvested only 10.2 million acres, an abandonment rate of 11%. Acreage losses were highest in Montana, which was down 25%. South Dakota was down 18% and North Dakota down 5%.

The most bearish number compared to expectations was the quarterly soybeans stocks at 256 million bushels. While it was 51% below the same quarter last year, it was well above trade estimates of 174 million bushels.

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“This was a game changing report for soybeans," said Ted Seifred with Zaner Ag Hedge in Chicago.

He said much of the increase came from an 80.8 million bushel revision to old crop production, but it takes a lot of pressure off the market and means lower prices, unless China comes back in with big purchases like they did a year ago.

“The other scary thing is USDA raised old crop yield by .8 bushels per acre, and we know this year’s crop is better than last year's crop,” he says.

All crop corn stocks in all positions on Sept. 1, 2021, came in at 1.24 billion bushels, which was down 36% from 2020’s 1.36 billion bushels figure. However, it was still above trade guesses of around 1.17 billion bushels

Seifred said on corn, USDA actually lowered U.S. production for 2020 by 71 million bushels, with decreases in exports offsetting that production. The export cut was tied to lost sales with export disruptions from Hurricane Ida. However, he said the report was not as bearish for corn as it was for beans.