Past performance is not necessarily indicative of future results. Futures and options trading involves risk of loss. Only risk capital should be used. This material represents the opinions of Justin Cardwell and is for informational purposes only.
Worried about your stock portfolio? What better way to target higher, largely uncorrelated returns than the U.S. grain markets?
“Corn, Wheat, Soybeans? I know nothing about those markets,” you protest.
Maybe not. But today you’re going to learn how to use two readily available numbers to get a “big picture view” of any U.S. agricultural market. It’s not everything, and it will not predict what prices will do. But in my opinion, it’s enough to allow you to sell deep out-of-the-money options on these markets with a fair amount of confidence. Enough to identify where option premium may appear more attractive and make more informed decisions.
Let’s get started.
…tracking these numbers will not necessarily tell you what prices are going to do. But it may give you an expected range where prices have historically tended to stay
What Are the Power Figures?
The grain “Power Figures” are two key numbers that can give a “snapshot” of the fundamental situation in any grain market. We call them this because, in our view, they weigh heavily in shaping price expectations in any grain market.
For price discovery in grains, the two key Power Figures you MUST know are:
1. Ending Stocks: Ending Stocks are the amount of grain left in storage at the end of the “crop year” (September 1) after all demand has been met. Ending stocks can also be more informally referred to as “leftover” or “carryover” stocks.
2. Stocks-to-Usage Ratio: The amount of projected ending stocks for the upcoming year divided by projected demand. In other words, if there was no crop at all this year, the stocks-to-usage ratio would tell you what percentage of demand could be met by using up what is leftover from last year’s crop.
Let’s talk a little about each.
Ending Stocks
In the March 2026 WASDE report, the USDA gave its monthly estimate for 2025/26 U.S. Corn Ending Stocks, projected at 2.127 billion bushels. This is where they expect U.S. corn supplies to be on September 1, 2026, just prior to this year’s harvest.
Ending stocks take all the year’s supply, subtract all the year’s demand, and come up with a figure. Ending stocks are the USDA’s projections of where supply will be on September 1.
The important thing to remember is that ending stocks are a key figure in what kind of supply environment the market is operating in. It’s the big picture, the stage, if you will, upon which all the other actors are playing.
Soybean ending stocks were projected at 350 million bushels, while wheat ending stocks came in at 931 million bushels. Each of those figures helps paint a broader picture of whether the market is dealing with abundance, balance, or tighter supply.
Stocks-to-Usage
Stocks-to-Usage is a measure of where supplies are as compared to where projected demand will be the upcoming year.
Using the March 2026 estimates for corn, ending stocks of 2.127 billion bushels versus projected demand (or “use”) of roughly 16.47 billion bushels.
Therefore, stocks to usage would be 2.127/16.47 = 12.9%.
This means if there were no corn harvested at all in 2026; the U.S. would theoretically be able to meet about 13% of demand with what is left over from the prior crop.
Huge yields led to a bumper crop that produced a hoard of excess supply. Sales of the 2025 crop have been steady, but not enough to clear the surplus. The March 31 Grains Stocks report shows 9.024 billion bushels of corn in U.S. storage; the largest amount ever recorded for that date. The USDA’s projected ending stocks for the 2025/26 marketing year sit at 2.127 billion bushels, the highest in seven years. That is a lot of corn hanging over this market.
The important thing to remember is that ending stocks are a key figure in what kind of supply environment the market is operating in. It’s the big picture, the stage, if you will, upon which all the other actors are playing.
A lot.
With planting season now underway, the early pace has been respectable. As of April 26, 25% of the U.S. corn crop had been planted, up 14 points from the week before and 6 points ahead of the five-year average. That still leaves a long way to go before the crop is made, but so far the market has had little reason to build much of a planting-weather premium into prices.
Why Are Ending Stocks and Stocks-to-Usage So Important?
These figures are so important because every factor that affects supply and demand is reflected in them. Everything that happens in a grain market, rain problems, bird flu, Chinese imports, Brazilian drought, increased population, harvest delays, are all important to price only in how they affect ending stocks and stocks-to-usage. Think of these two figures as an overall gauge of the environment the market is operating in.
Prices will move based on how the market thinks various events will affect ending stocks and stocks-to-usage. Significant changes in ending stocks or stocks-to-usage, both U.S. and global, can have a major impact on price.
Where do you get these figures? The USDA updates ending stocks and stocks-to-usage for all grains in its monthly Supply and Demand report, available at www.USDA.gov.
US Corn Ending Stocks vs Stocks/Usage Radio (Historical Comparison)
Conclusion
It is for this reason that you will often see us discuss both figures when talking about corn, soybeans, wheat, or other agricultural markets. Analyzing the implications of these figures is how we spend much of our time in selecting favorable markets for our clients. In my opinion, few figures play a more important role in grain price discovery, and they are well worth learning.
For one, relatively few individual investors pay close attention to these numbers, much less know how to use them properly. And two, it can often give you a range of where prices are likely to remain throughout different market conditions.
How? By comparing them to ending stocks and stocks to usage numbers from previous years and how prices reacted in those years. Yes, it takes a little elbow grease. But it’s not rocket science. And knowing how to use these two figures can put you head and shoulders above other grain option traders.
Again, tracking these numbers will not necessarily tell you what prices are going to do. But it may give you an expected range where prices have historically tended to stay.
Selling options outside of those ranges is how you can potentially put power figures to work. In some cases, it may help uncover option selling opportunities throughout the year.
As Spring planting season is now underway, the importance of these figures and their price predictive power cannot be overstated. For this reason, we’ll be featuring a special video tutorial on the blog this month revealing how we use these figures to sell credit spreads in our managed portfolios.
Until then, even a basic understanding of these power figures can help you make more informed judgements about grain prices, option premiums, and strike selection.
Past performance is not necessarily indicative of future results. Futures and options trading involve the risk of loss. Only risk capital should be used.
Justin Cardwell
Director of Research at OptionSpreaders.com
For more information on managed leveraged option selling accounts with OptionSpreaders.com, request a complimentary Investor Information Discovery Pack here or call 888-383-2779 to schedule a free consultation*. (*Qualified investors only. From outside the US call +1 813-999-0026.)
