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.

March 2022 USDA Quarterly Grain Stocks & Prospective Plantings

USDA Stocks and plantings positive to wheat, Plantings positive to corn, negative to beans

The USDA Quarterly Stocks report was not far off trade expectations for any of the crops. Corn and wheat stocks were both slightly lower, while bean stocks were slightly higher than the average trade guess.

The biggest surprise came in Prospective Plantings. Farmers indicated they would plant 89.4 million acres of corn, 2.5 million acres less than traders thought. Farmers indicated 2.2 million more acres soybeans instead.

After the aggressive market shakeout this week, the USDA report was released with many traders chased to the sidelines. Corn and wheat prices shot higher following the report, with July and December corn posting new life of contract highs.

Bean prices initially fell following the reports but so far have held well above the low of this week’s range.

Wheat prices surged higher and ended our Buy Signal in Chicago wheat. Wheat prices are still trading under the green line 20-day moving average, which is the next target for this upside move.

The December corn acreage was reported 210,000 acres below the lowest trade estimate. Corn prices got a shot in the arm from that number. Weather becomes more important with these smaller acres.

Other than corn acreage, there wasn’t much in the numbers today (at first blush) to push prices very far outside of their recent trading ranges.

Source: USDA, Reuters, StoneX

March USDA Supply & Demand

The USDA did not offer any surprises today. Grain usage estimates were in line with traders’ expectations.

In South America, the Argentine corn and bean crops were right in line with what trade expected. In Brazil, the soybean crop was 2 million tons smaller and corn crop 1 million ton larger than the average trade forecast. Most traders think the USDA will reduce the Brazilian bean crop further in subsequent reports.

Source: USDA, StoneX, Bloomberg

The USDA report did not take traders’ attention away from Russia’s invasion of Ukraine.  News reports Wednesday indicate more intense negotiations for a settlement were being facilitated by Israel.

Facing an onslaught of Russian destruction alone, Ukraine is being encouraged to negotiate a settlement. Commodity traders are betting that will occur, as of this writing. It is not too late to plant a crop there, and crop prices are reacting accordingly.  

They may see the Ukraine situation differently tomorrow.

Source: USDA, StoneX

February USDA Supply & Demand

USDA reports in line with pre-report estimates. No Surprises

As you look at the table of numbers below, you will notice the biggest change came in Brazilian soybeans, which were cut 5 million tons from last month’s estimate, but still came right in the middle of what traders expected.

The USDA expects a few more bushels of crop carryout, both in the world and U.S., but not enough of a difference to move prices.

This is about the most neutral report we have seen in a while.

Traders want to be bullish, thinking the combination of further South American crop losses, strong demand, and rampant inflation are all working in their favor. Spec funds are building bigger long positions in corn and beans and bailing out of short wheat.

U.S. equity major indexes cleared the green line 20-day moving average yesterday and are posting additional gains today.

Source: USDA, StoneX, Reuters

January USDA Supply & Demand

USDA report numbers positive, price action not so much

The U.S. corn and bean crops were increased slightly, and winter wheat plantings were also slightly larger than traders expected.

U.S. carryout for corn, wheat, and beans were also slightly larger than trade estimates.

South American crops were slightly smaller than traders expected and world carryout for beans was 4.7 million tons below the average trade guess; world corn carryout was down 1 million tons from guesses, while world wheat carryout was 0.7 million tons larger.

Taking the numbers at face value, one would expect prices across all the crop markets to be higher. But only beans have been able to maintain strength with wheat double digits lower. Corn has been mostly lower since the reports were released.

Beans should go higher, and corn should follow along, but the weakness in wheat is disconcerting. We have learned to be cautious in corn and beans this year when the wheat market is falling.

The sharply lower trade in beans is also baffling and we don’t like corn breaking below the green line 20-day moving average. Color us cautious but we don’t like it when positive reports give negative price action and that is where we are at the moment.

Hopefully the picture will be clearer as we move toward today’s close. 

Source: USDA, StoneX, Reuters

December 2021 Supply & Demand and Crop Production

Very small changes in December USDA estimates

The USDA did not change any U.S. or South American production numbers in their December update. Small changes to usage increased wheat stocks by 16 million bushels and were slightly larger than the average trade estimate.

Corn and bean ending stocks were unchanged from the November estimates, with corn being slightly larger than trade expected and beans slightly smaller.

In the world, ending stocks were increased a little over a million tons for corn and decreased by 1.7 million tons for soybeans. World wheat stocks were raised by 2.38 million tons.

Weakness in wheat prices is worrisome and have slid prices below the November wheat for March Chicago wheat and are threatening to do that for March Kansas City wheat. The bullish wheat fundamentals appear to be fully adjusted into the price and a downward trend has begun. This is worrisome, since spec funds were holding sizable net long positions on the latest CFTC report.

Corn and bean prices have retreated down to the green line.

Source: USDA, StoneX, Reuters

USDA summary comments:

Corn

This month’s 2021/22 U.S. corn supply and use outlook is unchanged from last month. The projected season-average farm price remains at $5.45 per bushel. Global coarse grain production for 2021/22 is forecast 2.7 million tons higher to 1,501.7 million. The foreign coarse grain outlook is for greater production, increased trade, and larger ending stocks relative to last month.

Oilseeds

Total U.S. oilseed production for 2021/22 is forecast at 130.3 million tons, up slightly due to an increase for cottonseed. Soybean supply and use projections for 2021/22 are unchanged from last month. Although soybean crush is unchanged, soybean oil production is raised on a higher extraction rate.

The U.S. season-average soybean and soybean oil price forecasts for 2021/22 are unchanged at $12.10 per bushel and 65.0 cents per pound, respectively. The soybean meal price forecast is increased $5.00 to $330.00 per short ton.

The 2021/22 global oilseed supply and demand forecasts include lower production and lower ending stocks compared to last month. Global oilseed production is projected at 627.6 million tons, down 0.4 million from last month mainly driven by lower soybean production.

Wheat

The outlook for 2021/22 U.S. wheat this month is for slightly lower supplies, unchanged domestic use, reduced exports, and higher ending stocks. Supplies are lowered, on decreased imports with a weaker-than-expected pace for Hard Red Spring (HRS).

Exports are lowered 20 million bushels to 840 million on slowing export sales and shipments with equivalent reductions for Hard Red Winter and HRS. Additionally, U.S. export prices are expected to remain elevated the rest of 2021/22, further diminishing U.S. competitiveness.

Projected 2021/22 ending stocks are raised 15 million bushels to 598 million but are still 29 percent lower than last year. The projected season-average farm price (SAFP) is raised $0.15 per bushel to $7.05 on NASS prices reported to date and expectations for cash and futures prices for the remainder of 2021/22. This would be the highest SAFP since 2012/13.

The global wheat outlook for 2021/22 is for higher supplies, greater consumption, increased trade, and higher ending stocks. Supplies are projected rising by 4.3 million tons to 1,067.5 million, primarily on the combination of increased beginning stocks for Australia and the EU and upward production revisions for Australia, Russia, and Canada.

Projected 2021/22 world consumption is raised 1.9 million tons to 789.4 million on higher feed and residual use more than offsetting lower food, seed, and industrial use.

November 2021 Supply & Demand and Crop Production

U.S. carryover stocks not as large as traders feared

Crop markets were all pressured during the past week as traders got ready for Tuesday’s USDA numbers. But the USDA did not surprise anybody with their production estimates or stocks numbers. As you can see from the table below, most of the November numbers were about as expected.

The biggest surprise came in soybeans where price action had convinced everybody that surpluses were building. The USDA economists instead cut soybean production by 23 million bushels from October and pegged U.S. bean carryout 22 million bushels less than the average trade estimate.

Remember, these are just numbers on a paper. As the old saying goes, “it takes money to buy whiskey”. The prices of today’s crop markets will not buy very many bushels from farmers anywhere. The South American crop is months away from harvest and U.S. farmers have locked their bins.

The USDA forecast the size of demand in feed grains, wheat, and oilseeds are all expected to set new records in the year ahead.

Our Buy Signal on soybeans this morning turned out to be perfect. The Super Bowl continues.

Source: USDA, StoneX, Reuters

USDA Summary

Corn

This month’s 2021/22 U.S. corn outlook is for greater production, increased corn used for ethanol, and marginally lower ending stocks. Corn production is forecast at 15.062 billion bushels, up 43 million from last month on a 0.5-bushel increase in yield to a record 177.0 bushels per acre.

Corn used for ethanol is raised 50 million bushels, based on September data from the Grain Crushings and Co-Products Production report and weekly ethanol production data as reported by the Energy Information Administration for the month of October. With use rising slightly more than supply, corn ending stocks are lowered 7 million bushels.

The season-average corn price received by producers is unchanged at $5.45 per bushel.

Soybeans

The U.S. soybean outlook for 2021/22 is for lower production and exports, and higher ending stocks. Soybean production is forecast at 4.42 billion bushels, down 23 million on lower yields. Lower yields in Indiana, Iowa, Ohio, and Kansas account for most of the change in production.

Exports are reduced this month reflecting reduced global imports and lower-than-expected shipments through October. With use falling more than supply, soybean ending stocks are raised 20 million bushels.

The U.S. season-average soybean price for 2020/21 is forecast at $12.10 per bushel, down 25 cents. Soybean meal and oil prices are unchanged at $325.00 per short ton and 65.0 cents per pound, respectively.

Wheat

The outlook for 2021/22 U.S. wheat this month is for lower supplies, higher domestic use, reduced exports, and slightly higher ending stocks. Supplies are reduced on lower anticipated imports, down 10 million bushels to 115 million on a continued weak import pace.

Higher anticipated seed use for the 2022/23 crop more than offsets lower expected food use driven by a slower-than-expected pace of flour milling as reported in the quarterly NASS Flour Milling Products report. As a result, total domestic use is projected 2 million bushels higher at 1,163 million.

Exports are lowered 15 million bushels to 860 million, on lower anticipated exports of Hard Red Spring and White wheat based on high domestic prices and muted export sales. Projected 2021/22 ending stocks are raised slightly to 583 million bushels, up 3 million from last month’s forecast but still the lowest U.S. ending stocks since 2007/08.

The projected 2021/22 season-average farm price is raised $0.20 per bushel to $6.90 on reported NASS prices to date and expectations on cash and futures prices for the remainder of the marketing year.

Source: USDA

USDA Reports Charts and Graphs

Click here to see the full USDA slideshow of charts and graphs.

Click here for the USDA November 2021 Crop Production Report.

Click here for the USDA November 2021 WASDE Report.

October 2021 Supply & Demand and Crop Production

USDA finds more corn and beans than expected

Here are the numbers from today’s USDA reports. Click here for the USDA presentation with all the details and charts.

Click here for the USDA October 2021 Crop Production Report.

Click here for the USDA October 2021 Wasde Report.

USDA Summary

Corn

This month’s 2021/22 U.S. corn production is forecast at 15.019 billion bushels, up 23 million on a marginal increase in yield to 176.5 bushels per acre.

Exports are raised 25 million bushels reflecting larger supplies and expectations of reduced competition from other major exporters. Projected feed and residual use is lowered 50 million bushels based on indicated disappearance during 2020/21.

With supply rising and use falling, corn ending stocks for 2021/22 are raised 92 million bushels. The season-average corn price received by producers is unchanged at $5.45 per bushel.

Soybeans

U.S. soybean production is forecast at a record 4.45 billion bushels, up 2 percent from the previous forecast and up 5 percent from 2020. Based on conditions as of October 1, yields are expected to average 51.5 bushels per harvested acre, up 0.9 bushel from the previous forecast and up 0.5 bushel from 2020.

Total planted area, at 87.2 million acres, is unchanged from the previous estimate, but up 5 percent from the previous year. Area harvested for beans, forecast at 86.4 million acres, is also unchanged from the previous forecast but up 5 percent from the previous year.

The U.S. season-average soybean price for 2021/22 is forecast at $12.35 per bushel, down 55 cents reflecting larger supplies. The soybean meal price is forecast at $325.00 per short ton, down $35.00. The soybean oil price forecast is unchanged at 65 cents per pound.

Wheat

Supplies for the 2021/22 U.S. wheat are lowered 10 million tons on reduced imports, to 125 million. Annual feed and residual use is lowered 25 million bushels to 135 million despite the NASS Grain Stocks report indicating greater disappearance in the first quarter compared to last year.

Significantly reduced supplies of Hard Red Spring, Durum, and White wheat for 2021/22 are expected to curtail feed and residual use for the remainder of 2021/22 along with the continued large price premium of wheat over corn.

Exports are unchanged at 875 million bushels but there are offsetting by-class changes. Projected 2021/22 ending stocks are reduced 35 million bushels to 580 million, which are the lowest U.S. ending stocks since 2007/08.

The projected 2021/22 season-average farm price is raised $0.10 per bushel to $6.70 on reported NASS prices to date and price expectations for the remainder of 2021/22.

Source: USDA, Reuters, StoneX

Sept 2021 USDA Quarterly Grain Stocks and Annual Small Grains Summary Reports

More corn and beans, less wheat

Stocks

The USDA reported bigger corn and bean stocks than traders expected. As you can see from the numbers below, corn and wheat stocks were within the range of trade estimates, but the USDA found more beans than anybody expected.

USDA Summary

Based on an analysis of end-of-marketing year stock estimates, disappearance data for exports, and farm program administrative data, the 2020 corn for grain production is revised down 71.0 million bushels from the previous estimate.

Corn silage production is revised down 54 thousand tons. Planted area is revised to 90.7 million acres, and area harvested for grain is revised to 82.3 million acres. Area harvested for silage is revised to .71 million acres.

The 2020 grain yield, at 171.4 bushels per acre, is down 0.6 bushel  from the previous estimate. The 2020 silage yield, at 20.5 tons per acre, remains unchanged from the previous estimate.

A table with 2020 acreage, yield, and production estimates by States is included on pages 17 and 18 of the Stocks report.

Soybean stocks stored on farms totaled 68.1 million bushels, down 52 percent from a year ago. Off-farm stocks, at 188 million bushels, are down 51 percent from last September. Indicated disappearance for June - August 2021 totaled 513 million bushels, down 40 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 2020 soybean production is revised up 80.8 million bushels from the previous estimate.

Planted area is revised to 83.4 million acres, and harvested area is revised to 82.6 million acres. The 2020 yield, at 51.0 bushels per acre, is up 0.8 bushel from the previous estimate. A table with 2020 acreage, yield, and production estimates by States is included on page 19 of this report.

Wheat

USDA Summary

All wheat production totaled 1.65 billion bushels in 2021, down 10 percent from the 2020 total of 1.83 billion bushels. Area harvested for grain totaled 37.2 million acres, up 1 percent from the previous year.

Spring wheat production was slightly larger than the average trade estimate. 

The United States yield was estimated at 44.3 bushels per acre, down 5.4 bushels from the previous year. The levels of production and changes from 2020 by type were: winter wheat, 1.28 billion bushels, up 9 percent; other spring wheat, 331 million bushels, down 44 percent; and Durum wheat, 37.3 million bushels, down 46 percent.

Click here to read the full Small Grains summary.

Source: USDA, StoneX, Reuters

September 2021 USDA Supply & Demand and Crop Production

USDA numbers not as big as feared

Crop prices initially broke lower following the USDA reports but found waiting buyers and were soon trading higher on the day, posting a reversal at this juncture. This might have been the low day of this price valley. The hurricane damage brought all the bears out of the woodwork, and they had already pressed prices down far enough.

The USDA report pegged the national corn yield at 176.3 bushels per acre, up half a bushel from the average trade estimate and 1.7 bushel per acre higher than last month. The USDA forecast national corn production at 14.996 billion bushels, up about 150 million bushels from the average trade guess and 250 million bushels above last month.

Corn ending stocks were estimated at 1.408 billion bushels on August 31, 2022. Some might want to make a big deal out of the carryover increasing over 1.4 billion bushels, but we expect demand to be larger than this latest USDA estimate, which was up 150 million bushels from last month.

The USDA’s bean yield was 50.6 bushels per acre, up 0.3 bushels from trade estimates and 0.6 bushels from last month’s report. Soybean production was pegged at 4.375 billion bushels, up 21 million bushels from the average trade estimate and 35 million bushels bigger than last month.

Soybean ending stocks were estimated at 185 million bushels for 2021-22. Traders expected stocks to be 5 million bushels larger. The USDA increased their bean ending stocks estimate 30 million bushels over last month.

The USDA did not change its U.S. wheat production estimate. U.S. wheat ending stocks were decreased 12 million bushels.

Click here to download the USDA’s Agricultural Statistics Board Briefing. This contains many great charts and graphs to help you understand how the USDA reached their conclusions.

Click here to download the full WASDE report.

Click here to download the full Crop Production report.

Source: USDA, StoneX, Reuters

USDA Summary Text and Tables

Corn production for grain is forecast at 15.0 billion bushels, up 2 percent from the previous forecast and up 6 percent from 2020. Based on conditions as of September 1, yields are expected to average 176.3 bushels per harvested acre, up 1.7 bushels from the previous forecast and up 4.3 bushels from last year. Acreage updates were made in several States based on a thorough review of all available data. Total planted area, at 93.3 million acres, is up 1 percent from the previous estimate, and up 3 percent from the previous year. Area harvested for grain is forecast at 85.1 million acres, up 1 percent from the previous forecast and up 3 percent from the previous year.

Soybean production for beans is forecast at 4.37 billion bushels, up 1 percent from the previous forecast and up 6 percent from 2020. Based on conditions as of September 1, yields are expected to average 50.6 bushels per harvested acre, up 0.6 bushel from the previous forecast and up 0.4 bushel from 2020. Total planted area, at 87.2 million acres, is down less than 1 percent from the previous estimate but up 5 percent from the previous year. Area harvested for beans in the United States is forecast at 86.4 million acres, down less than 1 percent from the previous forecast but up 5 percent from 2020. Acreage updates were made in several States based on a thorough review of all available data.

The outlook for 2021/22 U.S. wheat this month is for reduced supplies, slightly higher domestic use, unchanged exports, and decreased ending stocks. Supplies are reduced as imports are lowered 10 million bushels to 135 million on the import pace. Food use is raised 2 million bushels to 964 million, reflecting an upward revision of 2020/21 food use. Exports are unchanged at 875 million bushels but there are offsetting by-class changes. Projected 2021/22 ending stocks are reduced 12 million bushels to 615 million and are 27 percent below last year and the lowest in eight years. The projected 2021/22 season-average farm price is lowered $0.10 per bushel to $6.60 on reported NASS prices to date and price expectations for the remainder of 2021/22.