Sifting through USDA Grain Stocks report is a bit like separating wheat from chaff with threshing sticks: Time is needed to winnow the latest quarterly update that dropped Sept. 30 to harvest the kernels of truth revealed by the numbers.
The first step is to remember what the stocks are and aren’t. This is inside baseball stuff, but the playoffs are on, so it’s time to pay attention.
The quarterly survey asked 66,000 growers and 7,800 commercial facilities how much 2025 crop grain they had on Sept. 1 and its location, either on the farm or in town. These are estimates — just projections made from a sample fraction of all bins. In other words, it’s an attempt to count how many bushels are actually around.
Before this release, USDA’s projections on 2025 crop supplies were forecasts — a reflection on how agency statisticians thought the ebb and flow of production and demand would play out over the coming new crop marketing year. So, estimates talk about what is, and forecasts discuss what could be.
The Sept. 1 grain stocks estimate thus becomes a starting point for the 2026 crop marketing year. Add in 2026 crop production and imports, then take away usage, and the result is a forecast of what could be left over as a surplus on Aug. 31, 2027.
More old-crop corn than expected
The first look at the bottom line in the corn totals got plenty of attention from the get-go: Sept. 1 supplies of 2.1 billion bushels. Remember, this is how much was left over at the end of the 2025-26 marketing year that ended Aug. 31. That was more than the trade anticipated, despite a final estimate of 2025 production that was 57.3 million bushels smaller than previously reported. Apparent usage also declined, but details dribble slowly into the market.
Sifting through the numbers demands patience. The first new facts to emerge were on the cost side of the ledger.
USDA on Oct. 1 put all 2025 corn expenses at $900.22 per acre, or 1.7% higher than a prior estimate. Soybean costs in this accounting were up 1% to $660.62 per acre. Though the difference in increases is small, it could support the government’s conclusion that farmers raised less corn.
The first data on corn usage arrived an hour after those numbers.
More pieces in the demand puzzle
Ethanol production consumed 5.553 billion bushels during the 2025 marketing year, up 1.02% and just a couple million more than World Agricultural Supply and Demand Estimates (WASDE) report in September.
The final variable won’t be known until the Feed Outlook report in mid-October, when USDA’s numbers show how much grain walked off the farm. But lower production and exports suggest livestock demand couldn’t pick up the slack, causing carryout to rise.
Sept. 1 soybean stocks caused much less consternation. Old-crop inventories of 315 million bushels were 10 million less than previous estimates. Weekly sales data put exports off 13 million bushels from WASDE, and crush was also short of the prior pace. With the size of the crop left at 4.262 billion, this could suggest juggling in the hard-to-forecast residual-use category, a placeholder sometimes used to balance out discrepancies from report to report.
No explosive news from the stocks reports left traders little to do but volley the same old stories kicking around the market for months. The obvious culprit for moves was China. Lack of a strong new commitment and goals emanating from the summit between President Donald Trump and President Xi Jinping of China kept the path of least resistance down for both corn and soybeans. The energy market failed to provide much of a backstop, either, as talks between Iran and the U.S. bogged down over semantics and specifics.
Farm asset impacts
The muddle could spill over into assets affecting agriculture, as officials at the Federal Reserve prepare for their next two-day meeting on monetary policy Oct. 27-28. Initial betting on short-term Federal Funds futures showed two quarter-point hikes possible from the central bank, until a tepid employment report Oct. 2 cut that prospect in half.
Indeed, with the unemployment rate steady at 4.1% the Fed appeared ready to focus on the inflation half of its dual mandate after those reports gave no indication that price increases were multiplying — that is, starting to “spiral.” Nonetheless, this fine tuning from the Fed caused stagnant markets to chop around even more inconclusively.
Higher rates increase both capital costs for growers as well as operating expenses and cash flow requirements. This can lower the financial, or capitalized, value of farmland, while also increasing postharvest price increases needed to make grain storage profitable. Shifting sands for breakevens could make farming even riskier in the year ahead.