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.

September Quarterly Grain Stocks & Small Grains Summary

Corn stocks under the smallest trade estimate. Bean stocks larger than expected. Wheat exactly as expected.

Source: StoneX, Reuters

The smaller than expected corn stocks drove corn prices up through the 20-day moving average, with Friday’s high (at this writing) nearly reaching the September price peak. Technical traders will view today’s performance as a positive event as well as fundamental traders that have smaller beginning stocks for the crop year.

Corn prices have been in a relatively narrow trading range during the month of September and Friday’s report could give us the price thrust up to a Sell Signal.

Bigger supplies of soybeans to start the new crop year prevented beans from clearing the green line 20-day moving average Friday. Beans have been in a broad trading range since early August and next week, prices will be back down challenging support and adding days to our Buy Signal.  There is a gap left on the November bean chart at $13.50, which will likely be a downside target for technical traders.

The just finished wheat harvest was estimated to be smaller than the last USDA estimate and 128 million bushels smaller than traders expected. Prices surged up above the recent high and will likely give us Sell Signals early next week. On the next Sell Signal our advice will be to cover 30-60 days’ worth of cash needs.

Increased uncertainty in Ukraine and Russia has been positive to prices this week and will be closely watched next week.

From the USDA Grain Stocks report:

Old crop corn stocks in all positions on September 1, 2022 totaled 1.38 billion bushels, up 12 percent from September 1, 2021. Of the total stocks, 510 million bushels are stored on farms, up 29 percent from a year earlier. Off-farm stocks, at 867 million bushels, are up 3 percent from a year ago. The June - August 2022 indicated disappearance is 2.97 billion bushels, compared with 2.88 billion bushels during the same period last year.

Based on an analysis of end-of-marketing year stock estimates, disappearance data for exports, and farm program administrative data, the 2021 corn for grain production is revised down 41.4 million bushels from the previous estimate. Corn silage production is revised down 888 thousand tons.

2021 planted area is revised to 93.3 million acres, and area harvested for grain is revised to 85.3 million acres. Area harvested for silage is revised to 6.45 million acres. The 2021 grain yield, at 176.7 bushels per acre, is down 0.3 bushel from the previous estimate. The 2021 silage yield, at 20.1 tons per acre, remains unchanged from the previous estimate. A table with 2021 acreage, yield, and production estimates by States is included on pages 17 and 18 of this report.

Old crop soybeans stored in all positions on September 1, 2022 totaled 274 million bushels, up 7 percent from September 1, 2021. Soybean stocks stored on farms totaled 62.9 million bushels, down 8 percent from a year ago. Off-farm stocks, at 211 million bushels, are up 12 percent from last September. Indicated disappearance for June - August 2022 totaled 698 million bushels, up 36 percent from the same period a year earlier.

Based on an analysis of end-of-marketing year stock estimates, disappearance data for exports and crushings, and farm program administrative data, the 2021 soybean production is revised up 30.2 million bushels from the previous estimate. Planted area is unchanged at 87.2 million acres, but harvested area is revised to 86.3 million acres. The 2021 yield, at 51.7 bushels per acre, is up 0.3 bushel from the previous estimate. A table with 2021 acreage, yield, and production estimates by States is included on page 19 of this report.

Special Note

The marketing year for corn and soybeans is finished and a thorough review of the balance sheet was completed. This process, which is normal for this time of the year, led to revisions in acreage, yield, and production for the 2021 crop.

U.S. corn production for 2021 is revised down 41.4 million bushels and U.S. soybean production is revised up 30.2 million bushels from the previous estimate. All revisions can be found on pages 17-19.

All wheat stored in all positions on September 1, 2022 totaled 1.78 billion bushels, up less than 1 percent from a year ago. On-farm stocks are estimated at 591 million bushels, up 41 percent from last September. Off-farm stocks, at 1.18 billion bushels, are down 13 percent from a year ago. The June - August 2022 indicated disappearance is 543 million bushels, down 24 percent from the same period a year earlier.

September USDA Supply & Demand

USDA soybean yield estimate smaller than expected at 50.5 bpa

Soybeans

The surprise in the USDA numbers came in a lower than expected US soybean yield estimate. The USDA cut their US soybean yield estimate from 51.9 bpa in August to 50.5 bpa in this month’s report. This was smaller than the low end of the trade estimate range.

The USDA also cut the soybean harvested acreage estimate by 1% from last month, dropping it down to 86.6 million acres. This was 611,000 acres smaller than the average trade estimate.

The reduced bean yield and acreage numbers put the estimate for total soybean production at 4.378 billion bushels, which is 153 million bushels below the August report and 118 million bushels below the average trade estimate.

Crush (-20 million bushels) and export (-70 million) estimates were both reduced. Overall, this dropped the 2022-23 US soybean carryout to 200 million bushels, down from 245 million in August. The average trade estimate was for a slight increase in soybean carryout.

The tighter supply numbers sent bean prices higher immediately after the report release.

World soybean carryout was reduced by nearly 2.5 million tons, dropping the USDA estimate below the 100 million ton mark to 98.92 million tons.

Corn

The USDA had fewer changes for the corn market. They lowered their US corn yield estimate to 172.5 bpa, which was exactly equal to the average trade estimate, so there was no surprise for corn yield like there was for beans.

The USDA did lower their harvested acreage estimate for corn 1.3%, down to 80.8 million acres. This was 886,000 acres smaller than the average trade estimate.

The lower acreage estimate reduced the USDA corn production estimate by 415 million bushels to 13.944 billion bushels. This was 144 million bushels lower than the average trade estimate.

However, the corn carryout estimate was essentially equal to the average trade estimate at 1.219 billion bushels. The lower corn production estimate was offset by smaller feed  and residual use (-100 million bushels), exports (-100 million) and corn used for ethanol (-50 million).

The world corn carryout was reduced by 2.15 million tons to 304.53 million tons, which was larger than trade expected.

Wheat

The USDA left their US wheat carryout estimate unchanged from August at 610 million bushels. They increased their world carryout estimate by 1.23 million tons.

Source: USDA, StoneX, Reuters

August USDA Supply & Demand

USDA raises bean yield estimate and cuts corn yield more than expected

Corn

The USDA reduced their U.S. corn yield estimate by 1.6 bpa, down to 175.4 bpa. That took U.S. corn production down 146 million bushels to 14.359 billion bushels. This was below the trade estimates of 175.9 bpa and 14.392 billion bushels.

Corn carryout this fall (2021-22) is now estimated to be 1.530 billion bushels, up 20 million bushels from last month. Ending stocks one year from now (2022-23) are estimated to be 1.388 billion bushels, with total use for the 2022-23 crop year down 45 million bushels from the July estimate.  

World 2022-23 corn carryout was reduced 6.26 million metric tons from the July estimate to 306.68 million tons.

The bottom line, U.S. and world corn supplies tightened on the balance tables.

Soybeans

U.S. soybean yields were pegged at 51.9 bpa, up from 51.5 bpa last month. Traders expected yields to be lowered to 51.1 bpa. U.S. soybean production was estimated at 4.531 billion bushels, up 26 million bushels from last month. The trade estimate was 4.481 billion bushels. Thus, bean production was 50 million bushels larger than the average trade estimate.

Bean carryover the 2021-22 crop year came in at 225 million bushels, up 10 million from the July estimate, but nearly exactly what the trade expected. Soybean carryover for the 2022-23 crop year was 245 million bushels, up 15 million from last month and the trade estimate.

World 2022-23 soybean carryout increased 1.8 million metric tons from the July estimate to 101.41 million metric tons.

The bottom line, U.S. and world soybean supplies were slightly larger. 

Wheat

U.S. production was virtually unchanged, 2022-23 U.S. ending stocks decreased 29 million bushels due primarily to increased exports. World wheat carryout was virtually unchanged.

The bottom line, fundamentals did not change much on wheat.

Source: USDA, Bloomberg, StoneX

July USDA Supply & Demand

USDA numbers slightly larger than expected

All the key USDA numbers from today’s reports were in line with the average trade estimate. However, each estimate, except for Brazilian corn, was slightly larger than trade expected. But none of the larger estimates were big enough to allow for production cuts due to weather.

Soybean new crop ending stocks fell 50 million bushels to 230 million bushels, due to the June 30 smaller acreage estimate. The number was still 19 million above trade expectations.

The USDA did not change their corn or bean yield estimates this month.

The only change the USDA made to their South American production estimates was in Argentine soybeans, where they increased their estimate slightly.

There was nothing in the reports to excite traders. Markets have been unable to get up to the green line 20-day moving average this week. This promises to bring more technical selling.

June Acreage & Quarterly Grain Stocks

USDA Surprises Traders with Fewer Bean Plantings

The U.S. corn acreage was 40,000 acres less than expected, about half a million acres larger than the March intentions, but about 3.5 million acres smaller than last year’s final number.

Beans had the most surprising number, coming in 2.1 million acres below expectations and 2.6 million acres below the March estimate. However, today’s bean planting estimate was still 1.1 million acres larger than last year’s final number.

Wheat plantings were 75,000 acres larger than trade expected and 259,000 acres smaller than the March estimate, but 389,000 acres larger than last year’s final number.

U.S. corn stocks were almost exactly what the trade expected and totaled 235 million bushels larger than last year at this time.

Bean stocks were 5 million bushels larger than the trade expected and totaled 202 million bushels larger than last year.

Wheat stocks were 5 million bushels larger than trade expectations and down 185 million bushels from last year.

Markets will continue their focus on weather, with increased importance for beans.

Source: USDA, Reuters

June USDA Supply & Demand

USDA reports mostly unchanged from last month

Small adjustments in U.S. beginning stocks numbers (-30 million bushels for beans; +45 million bushels for corn) were the biggest changes seen on USDA reports Friday. U.S. corn and soybean acreage and yield estimates were left unchanged from last month. Usage changes were insignificant.

U.S. wheat yield was increased 0.3 bpa to 46.9 bpa, which increased production by 8 million bushels. U.S. wheat ending stocks increased by the same 8 million bushels.

Global wheat stocks were reduced less than a million tons, while bean stocks were increased nearly a million tons, and corn stocks increased 5 million tons from last months report.

Although the corn numbers were larger than traders expected, corn prices didn’t take long to recover losses and move higher on the day.

The USDA left Ukraine’s 2022-23 supply demand table for wheat unchanged from last month. They increased Ukraine’s 2022-23 corn production by 5.5 million metric tons and left exports unchanged at 9 million tons (23 million last year).

The USDA made small increases to their South American soybean production estimates but left their corn production estimates unchanged.

Traders did not get any significant number change in the fundamentals. Weather forecasts are signaling the potential for hot dry conditions over the next two weeks, which is much more important to traders than Friday’s USDA report.

Source: USDA, StoneX, Reuters

May USDA Supply & Demand

The highly anticipated May USDA supply demand estimates contained a couple of surprises. First both old and new crop U.S. wheat carryout was smaller than trade expected. Second, the first USDA 2022-23 yield estimate was pegged at 177.0 bushels per acre, which was 4.0 bpa below the adjusted trend yield estimate in the February USDA Ag Outlook Forum.  See the U.S. supply demand tables below.

The rest of the key U.S. numbers were not far from trade estimates. Both old and new corn carryout were larger than expected. Despite the lower than expected 2022-23 corn yield, carryout increased on a 2.5% cut to domestic use and exports.

The 2022-23 outlook for U.S. soybeans is for higher supplies, crush, exports, and ending stocks compared with 2021-22. The outlook for 2022/23 U.S. wheat is for reduced supplies, exports, domestic use stocks, and higher prices.

The 2022-23 world carryout for corn and soybeans were larger than expected, while world wheat carryout was smaller than expected.

In South America, the USDA left their April estimates for Brazilian corn and bean production unchanged while they lowered their Argentine corn estimate by 1.5 million tons and left Argentine bean production unchanged.

April USDA Supply & Demand

US corn and wheat ending stocks larger than expected, while soybeans a bit lower

The USDA kept U.S. corn carryout unchanged from their March report, instead of lowering it slightly as the trade expected. Global corn carryout was increased 5 million tons, while trade expected no change.

U.S. soybean carryout was lowered 25 million bushels from March on reduced exports. This was largely in line with trade expectations. Global soybean carryout was not reduced as much as trade expected.

U.S. wheat carryout was increased 25 million bushels on reduced usage, which was a larger increase than trade expected.

The USDA increased their Brazilian corn production estimate nearly a million tons more than expected, while decreasing their Brazilian soybean production estimate slightly more than expected. The USDA left their Argentina production estimates unchanged, while trade expected declines.

Source: Reuters, USDA, StoneX

USDA Summary

Corn

This month’s 2021/22 U.S. corn outlook is for offsetting changes to feed and residual use and corn used for ethanol production, with unchanged ending stocks. Feed and residual use is lowered 25 million bushels, corn used to produce ethanol is raised 25 million bushels.

With offsetting use changes, ending stocks are unchanged at 1.440 billion bushels. The season-average farm price is raised 15 cents to $5.80 per bushel based on observed prices to date.

Global coarse grain production for 2021/22 is forecast 2.7 million tons higher to 1,501.6 million. This month’s 2021/22 foreign coarse grain outlook is for higher production, reduced trade, and larger ending stocks relative to last month.

Soybeans

The USDA increased U.S. exports 25 million which lowered ending stocks by the same amount. The season-average soybean price forecast is unchanged this month at $13.25 per bushel. Soybean meal prices are also unchanged at $420 per short ton. The soybean oil price is projected at 70.0 cents per pound, up 2 cents.

The 2021/22 global soybean supply and demand forecasts include lower production, crush, trade, and ending stocks. Global soybean production is reduced 3.1 million tons to 350.7 million on lower crops for Brazil and Paraguay. Global soybean stocks are lowered 0.4 million tons to 89.6 million mainly on lower U.S. and Argentine stocks.

Wheat

The outlook for 2021/22 U.S. wheat this month is for stable supplies, lower domestic use, reduced exports, and higher ending stocks. Annual feed and residual use is lowered 10 million bushels to 100 million. Exports are lowered 15 million bushels to 785 million as the U.S. remains uncompetitive to most markets and exports would be the lowest since 2015/16. Projected 2021/22 ending stocks are raised 25 million bushels to 678 million.

The global wheat outlook for 2021/22 is for slightly higher supplies, increased consumption, lower trade, and reduced ending stocks.

Projected 2021/22 global trade is lowered 3.0 million tons to 200.1 million as lower exports by the EU, Ukraine, the United States, and Kazakhstan are not completely offset by higher exports by Russia, Brazil, and Argentina.

The majority of Ukraine’s exports have already been shipped with limited additional amounts expected for the remainder of 2021/22. Projected 2021/22 world ending stocks are lowered 3.1 million tons to 278.4 million, a 5-year low.