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News and USDA Data

A collection/archive of USDA Report data and our post-report comments, as well as featured article by Roach Ag Daily Grain Plan editors and writers.


John Roach
John Roach
John Roach's Blog

June 2023 USDA Supply & Demand

Ho Hum USDA numbers keep weather as the main market focus.

 Sunday night’s opening will be a reflection of next week’s weather forecast. All of the fundamentals given to us by the USDA today will fade by comparison. So far, prices haven’t changed much since the reports were released.

Corn

The 2023-24 U.S. corn outlook is little changed from last month with increases to both beginning and ending stocks. Corn area and yield forecasts are unchanged.

Beginning stocks are up 35 million bushels reflecting a forecast decline in exports for 2022-23 that is partly offset by lower imports. Exports were lowered 50 million bushels. With no supply or use changes for 2023-24, ending stocks are raised 35 million bushels. The season-average farm price received by producers is unchanged at $4.80 per bushel.

The USDA cut their Argentine corn production estimate 2 million tons and raised their Brazilian estimate 2 million tons, canceling out the change in South America this month.

Soybeans

This month’s U.S. soybean supply and use projections for 2023-24 include higher beginning and ending stocks. Higher beginning stocks reflect reduced exports for 2022-23, down 15 million bushels to 2.0 billion based on lower-than-expected shipments in May and competition from South America.

With increased supplies for 2023-24 and no use changes, soybean ending stocks are projected at 350 million bushels, up 15 million. The soybean price is forecast at $12.10 per bushel, unchanged from last month.

The USDA also cut their Argentine bean production estimate 2 million tons, while increasing their Brazilian estimate by 1 million tons.

Wheat

Winter wheat production is forecast at 1.14 billion bushels, up 1% from the May 1 forecast and up 3% from 2022. As of June 1, the United States yield is forecast at 44.9 bushels per acre, up 0.2 bushel from last month but down 2.1 bushels from last year’s average yield of 47.0 bushels per acre. Hard Red Winter production, at 525 million bushels, is up 2% last month.

The outlook for 2023-24 U.S. wheat this month is for larger supplies, unchanged domestic use and exports, and higher stocks. Supplies are raised as all wheat production is projected at 1,665 million bushels, up 6 million from last month on higher

Hard Red Winter production more than offsetting reductions in Soft Red Winter and White Winter. The all wheat yield is 44.9 bushels per acre, up 0.2 bushels from last month but remaining below last year. Total use is unchanged with all of the production increase added to ending stocks, now projected at 562 million bushels.

The 2023-24 season-average farm price is lowered $0.30 per bushel to $7.70 on larger U.S. and foreign wheat supplies.

Source: USDA, Bloomberg

 

 

May Supply & Demand

New crop corn and beans posted new lows but wheat surged higher

US old crop corn carryout increased 75 million bushels from last month, which was 50 million bushels larger than the trade expected. Old crop bean and wheat carryout were virtually unchanged as the trade expected.

In the USDA’s first estimate for 2023-24, corn carryout came in at 2.22 billion bushels, up 800 million bushels from this fall’s forecast. Bean carryout for 2023-24 at 335 million bushels is up 120 million bushels from this fall’s estimate. Wheat carryout for next year was pegged down 42 million bushels from this year.

One of the biggest number changes came in the Brazilian corn crop, now estimated to be 130 million tons, up 5 million tons from last month. The 2023-24 world corn carryout was projected up 15.5 million tons from this fall’s estimate.

The 2023-24 world soybean carryout came in at 122.5 million tons, up 21.5 million from this year’s estimate.

World wheat carryout for 2023-24 slipped about 2 million tons year over year.

The market reaction has been negative for new crop corn and beans with these larger than expected production and carryout numbers. Kansas City wheat surged up to its resistance at $9/bushel for the July 2023 contract.

This week prices tried to rally but only Kansas City wheat and Minneapolis wheat were able to make gains. Technical selling pressure, better than normal planting progress, and a decent weather forecast stopped the corn and bean rally this week. Today’s report drove prices to new lows.

Source: USDA, Bloomberg, StoneX

April USDA Supply & Demand

Few changes in US numbers from last month. Smaller Argentine crops.

The government's US numbers were virtually the same as a month ago, with smaller crops in Argentina, and a slightly larger bean crop in Brazil. Today's estimates were no surprise to the traders. 

Look at the prices we've traded during the past month. Traders have no fundamental reason to move prices beyond that range. The Argentine crop is still an uncertainty because its in the early stages of harvest, but the Brazilian bean crop is nearly in the bin and the second crop corn is off to a good start.

The new risk is in the United States and all the northern hemisphere where planting has just started. Next month's prices will trade based on how traders view the crop plantings and weather risk. Today's numbers told us again that we need big crops. 

Traders will turn their attention to the weekly planting progress numbers, exports, and ultimately the May USDA report where we see the first official 2023/24 crop estimates.

Source: USDA, Bloomberg

March USDA Quarterly Grain Stocks & Prospective Plantings

US soybean stocks and plantings smaller than expected.

There weren't huge surprises in the March 31 USDA reports. Overall, the reports trended bullish for soybeans.

March 1 US soybean stocks were 57 million bushels smaller than the average trade estimate, and intended acres to be planted were 737,000 acres smaller than the trade estimate. Bean prices were quickly up about 30 cents following the report release. 

For corn, March 1 stocks were 69 million bushels small than the average trade estimate, but prospective plantings came in 1.116 million acres above the average trade estimate.

Wheat stocks were 12 million bushels larger than expected, and Wheat plantings totaled a little more than 1 million acres larger than the trade expected.

The current rallies are providing an opportunity to dribble a little more corn into the market on our current Sell Signal, and we are not far away from generating a soybean Sell Signal that we are looking forward to making more sales on.

We have learned historically that selling corn in April and beans in May are very good strategies, if there is not a substantial weather problem through the US growing season.

The uncertainty of the South American second corn crop and the entire North American crop, combined with uncertainties in the Black Sea region have pushed our crop markets higher this week.

The bottom line is that until we start to see something develop, we have limited upside potential. 

We are happy to have the rallies to make sales on. Keep powder dry for summertime problems.

 

Source: USDA, Bloomberg

 

March USDA Supply & Demand

U.S. Corn Carryout Grows while Argentine Crops Shrink

Today’s USDA Supply & Demand report was a mixed bag of information.

U.S. Corn exports were reduced 75 million bushels from the February estimate, leading to a larger than expected jump in domestic ending stocks. On the other hand, Argentina’s corn production estimate was reduced 3 million tons more than expected.

The bean numbers were bullish, causing an initial jump in futures prices that has since cooled off (as of this writing). A 10 million bushel cut to U.S. crush was more than offset by a 25 million bushel increase in exports, leading to a net reduction in ending stocks of 15 million bushels. Pre-report trade was expecting just a slight 5 million bushel decrease in carryout.

Argentina bean production was reduced from 41 million tons to 33 million, smaller than the average trade guess of 36.55.

The U.S. wheat balance sheet was left unchanged. World wheat supplies shrank slightly, though that cut was largely attributed to an adjustment to China’s 20/21 feed and residual use carried through to world new crop beginning inventory. 

Without any major surprises in today’s report, traders will shift their interest to the closely followed Grain Stocks & Prospective Plantings reports due out at 11:00am on March 31st.

Source: USDA, Bloomberg

February USDA Supply & Demand

Small fundamental changes disappoint bullish traders

After the USDA released its numbers, prices slid across all crop markets before bouncing 15 minutes later.

Kansas City wheat gave us the strongest post-report trade. KC March wheat rallied to new recent highs following the report with traders concerned about dry weather forecast in the western Southern Plains. Chicago and Minneapolis wheat also firmed but are currently trading below recent highs.

This month’s 2022-23 U.S. corn outlook forecast lower corn used for ethanol by 25 million bushels. With no other use changes, U.S. corn ending stocks are up 25 million bushels from last month.

The USDA lowered US soybean crush by 15 million bushels. With soybean exports unchanged, ending stocks are forecast at 225 million bushels, up 15 million.

The 2022-23 U.S. wheat supply and demand numbers were little changed this month, with only minor revisions to domestic use and ending stocks.

The global numbers contained no shocks either.

Argentine production estimates were smaller than traders expected but were well below the USDA’s January estimates.

Source: USDA, Bloomberg

January USDA Supply & Demand, Quarterly Grain Stocks, and Winter Wheat Seedings

USDA Summary

The USDA final crop production estimates for 2022 were lowered for corn and soybeans, 200 million bushels and 70 million bushels, respectively.

The smaller corn and bean productions totals were a surprise to the trade, who expected US production numbers to be increased slightly.

Corn production was reduced due to a surprising cut of 1.64 million harvested acres. The smaller acres offset a bigger national average yield, which was increased from 172.3 to 173.3 bpa.

Bean production was cut due to a combined 0.4 bpa reduction in yield and 295,000 acreage reduction.

The USDA reported winter wheat plantings totaling 36.95 million acres, a larger than expected 3.7 million acre increase. Traders expected US winter wheat acreage to be increased by just 1.2 million acres.

US wheat acres rebounded due to the high crop insurance guarantees, following recent years of lower wheat acreage plantings.

US carryout estimates for corn, beans, and wheat were all lower than the December estimates. This was a surprise, with most traders expected carryout to increase slightly across the board.

Corn and bean prices were sharply higher on the surprising reductions. Wheat prices struggled initially after the report due to the higher US acreage total and impressive wheat crops expected out of Australia and India.

So far, our Buy Signals on corn and wheat this week have worked quite well.

US quarterly stocks were smaller than last year and smaller than the average trade estimates. In fact, each were near the low of the range of trade estimates. 

In Brazil, soybean production was increased 1 million tons to 153.0 million metric tons, while Brazilian corn production was reduced 1 million tons to 125.0 million tons.

Argentine bean production was lowered more than expected, dropping from 49.5 to 45.5 million tons. Argentine corn production was cut from 55.0 to 52.0 million tons, which was in line with trade expectations.

World carryout numbers were reduced about 2 million tons for corn but increased nearly 1 million tons each for soybeans and wheat.

Source: USDA, StoneX, Reuters

Source: StoneX, USDA

December USDA Supply/Demand

The USDA made few changes to their supply demand numbers in the December WASDE report.

 

They made no changes to their US wheat and soybean supply demand numbers.

They cut US corn exports by 75 million bushels, acknowledging the slow pace of corn sales and shipments. This increased their US corn carryout total by 75 million bushels.

There were few changes to the world supply demand numbers. Beans and wheat were largely unchanged from last month. The world corn carryout total was reduced by 2.36 million tons (-0.8%), which was the largest change made to the world numbers.

The USDA also left their South American production estimates unchanged this month.

Friday’s USDA report had very limited impact on prices. Even though the government cut exports, the corn market traded higher following the release of the numbers. Soybeans also were able to move higher after the numbers came out, but wheat prices slid on the lack of improved numbers.

 

Source: USDA, Reuters, StoneX

November USDA Supply/Demand

USDA raises corn and bean yields slightly; little change in stocks.

Although it was not immediately apparent in the USDA supply demand report, Argentina is moving into a key role in world corn prices.

The USDA forecast total world coarse grain exports at 225.12 million metric tons in today’s report. 59.22 million tons were forecast to be shipped from the United States, with 46.5 million tons from Argentina, and 47.03 million tons from Brazil. That Argentine number was down half a million tons from last month.

Drought in Argentina is threatening their corn crop and moving that country into a more important role in corn prices. Our weather consultant didn’t see immediate relief for the Argentine drought in his report this morning.

The majority of the Brazilian corn crop is planted as a second crop following soybeans and won’t have much impact on our market for several months.

Meanwhile, corn prices have been beat down due to low water in the Mississippi and discounted feed grain prices in the Black Sea region. Our system is giving us the sixth day of a Buy Signal on corn, with prices as cheap as they’ve been since September.

If you are wanting to re-own sold corn or purchase feed needs, this is a good time to do it.

Today’s USDA report did not change soybean fundamentals, available US supplies are still relatively tight, and a monster crop is being planted in Brazil.  
 
Today we saw another round of soybean purchases by China. The US is about the only store in town until the Brazilian crop harvest. Midwest rains have helped the low water conditions in the Mississippi River and soybean oil demand has been strong due to tight diesel supplies.  
 
US wheat carryover was reduced by 5 million bushels. Traders are much more interested in the crop conditions in US winter wheat country where it is too dry. The US winter wheat crop was rated just 30% good to excellent (51% five-year average) in Monday’s Crop Progress report. 
 
All three of the crop markets we follow have been in trading ranges for weeks. There wasn’t enough fundamental change in today’s reports to take us out of those trading ranges immediately. Keep an eye on South American weather. 

Source: USDA, Reuters

October USDA Supply & Demand

USDA lowered US corn and bean yield estimates

Quick summary

  • US corn yield as expected
  • US soybean yield smaller than expected
  • US wheat carryout larger than expected due to lower demand

The USDA’s October corn yield and production estimates were smaller than the September numbers but largely in line with trade estimates. New crop corn carryout was reduced from September but by only about half as much as trade expected.

December corn was only a few cents lower following the report release.

The surprise this month came from a lower than expected US soybean yield estimate. The USDA pegged the US bean yield at 49.8 bpa, compared to 50.5 bpa last month. Trade was expecting an even to slightly higher bean yield. The 49.8 bpa estimate matched the lowest trade guess.

Soybean production was lowered to 4.31 billion bushels, down 1% from the previous forecast and down 3% from 2021. Trade was expecting an even to slightly higher bean production estimate.

November soybeans rallied sharply following the reports and returned all the way to the green line 20-day moving average, ending our soybean Buy Signal.

New crop wheat ending stocks were larger than trade expected. The USDA lowered the new crop US wheat carryout by 34 million bushels to 576 million bushels. Trade was expecting a 554 million bushel carryout.

Source: USDA, StoneX, Reuters

 

From the USDA reports:

Corn

Corn production for is forecast at 13.9 billion bushels, down less than 1% from the previous forecast and down 8% from 2021. Based on conditions as of October 1, yields are expected to average 171.9 bushels per harvested acre, down 0.6 bushel from the previous forecast and down 4.8 bushels from last year.

After a thorough review of all available data, acreage estimates are unchanged from last month. Total planted area, at 88.6 million acres, is unchanged from the previous estimate but down 5 percent from the previous year.

Area harvested for grain, forecast at 80.8 million acres, is unchanged from the previous forecast but down 5 percent from the previous year.

Soybeans

Soybean production for beans is forecast at 4.31 billion bushels, down 1% from the previous forecast and down 3% from 2021. Based on conditions as of October 1, yields are expected to average 49.8 bushels per acre, down 0.7 bushel from the previous forecast and down 1.9 bushels from 2021.

After a thorough review of all available data acreage estimates are unchanged from last month. Total planted area, at 87.5 million acres, is unchanged from the previous estimate but up less than 1 percent from the previous year.

Area harvested for beans in the United States is forecast at 86.6 million acres, unchanged from the previous forecast but up less than 1 percent from 2021.

Wheat

The outlook for 2022/23 U.S. wheat this month is for lower supplies, domestic use, exports, and stocks.

Supplies are reduced on lower 2022/23 production based on the NASS Small Grains Summary that indicated reductions in both harvested area and yield. This lowered production by 133 million bushels to 1,650 million, leaving production only minimally higher than last year.

Partially offsetting the production decline are higher projected imports, raised 10 million bushels to 120 million, all for Hard Red Spring. Annual feed and residual use is lowered 30 million bushels to 50 million, based on first quarter disappearance, as indicated in the NASS Grain Stocks report. This is the lowest first quarter total disappearance since 1983/84.

Wheat exports are lowered 50 million bushels to 775 million on reduced supplies, slow pace of export sales, and continued uncompetitive U.S. export prices. This would be the lowest U.S. wheat exports since 1971/72.

Projected ending stocks are lowered 34 million bushels to 576 million, which would be the lowest since 2007/08. The season-average farm price is raised $0.20 per bushel to $9.20 on reported NASS prices to date and expectations for futures and cash prices for the remainder of 2022/23.

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