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USDA projects smaller harvest and tighter supplies for 2022

Today USDA released the latest World Agricultural Supply and Demand Estimates (WASDE) report.

2022/2023 U.S. Ending Stocks

For corn, the USDA pegged the U.S. 2022-23 projected ending stocks at 1.219 billion bushels. This is above the trade estimate of 1.180 billion bushels but a far cry from USDA's August estimate of 1.388 billion bushels.

For soybeans, the U.S. ending stocks were 200 million bushels, far below trade's expectation of 240 million bushels and USDA’s August estimate of 245 million bushels. 

In its report, the USDA pegged the U.S. wheat ending stocks at 610 million bushels, reflecting no change from August’s estimate of 610. The trade’s expectation was 622 million.

2021/2022 U.S. Ending Stocks

For corn, the USDA pegged the U.S. 2021-22 projected ending stocks at 1.525 billion bushels vs. the trade estimate of 1.537 billion bushels and the August USDA estimate of 1.530 billion bushels.

For soybeans, the U.S. ending stocks were 240 million bushels vs. the trade that expected the USDA to print 233 million bushels today. In August, the USDA’s estimate was 225 million bushels.

USDA estimates wheat ending stocks will be 660 million bushels. 

2022/2023 World Ending Stocks

On Monday, the USDA pegged the world’s corn ending stocks at 304.5 mmt. vs. the trade’s expectation of 301.8 mmt. and USDA’s August estimate of 306.7 mmt.

For soybeans, the world ending stocks are estimated at 98.9 mmt., below both the trade’s expectation of 101.1 mmt. and USDA's estimate last month of 101.4 mmt.

For wheat, the USDA pegged world ending stocks at 268.6 mmt., vs. the trade’s expectation of 267.6 mmt. and the August estimate of 267.3 mmt.

2021/2022 World Ending Stocks

For 2021/2022 USDA pegged the world’s corn ending stocks at 312.1 mmt., on par with the trade’s expectation of 312.1 mmt. USDA’s August estimate was 311.8 mmt.

For soybeans, the world ending stocks are estimated at 89.7 mmt., slightly below the trade’s expectation of 89.9 mmt. and reflecting no change from USDA’s August estimate of 89.7 mmt.

For wheat, the USDA pegged world ending stocks at 275.7 mmt. This is just slightly below the trade’s expectation and USDA's previous estimate of of 276.4 mmt.

2022 Yield Estimates 

USDA is projecting 2022 U.S. corn harvest to be 13.944 million bushels with a yield of 172.5 bushels per acre. USDA also decreased projected harvested area from 81.8 million acres to 80.8 million acres. Trade expectation was 14.077 million bushels with a yield of 172.4 bushels per acre. In August USDA projected 14.359 million bushels at 175.4 bushels an acre.

For soybeans, USDA is projecting a harvest of 4.378 million bushels and yield of 50.5 bushels per acre. Trade expected 4.481 million bushels and 51.5 bushels per acre. In August USDA projected 4.531 million bushels and 51.9 bushels per acre.

More from USDA

"This month’s 2022/23 U.S. corn outlook is for lower supplies, smaller feed and residual use, reduced exports and corn used for ethanol, and tighter ending stocks," USDA says in the report. "U.S. soybean supply and use changes for 2022/23 include higher beginning stocks and lower production, crush, exports, and ending stocks. Higher beginning stocks reflect a lower export forecast for 2021/22."

Trade Reaction

Jake Hanley of Teucrium Funds says today’s report was supportive for both U.S. corn and soybean prices.

"The USDA lowered estimates in two key categories for both crops: area harvested and yield per harvested acre," he says. "The market will likely expect the USDA to lower their corn yield estimates again in the October report.  This was a supportive report for corn and reflects a very tight U.S. corn balance sheet.

"The surprise today came in the soybean market. Given the acreage and yield revisions in soybeans the U.S. is now staring at the 3rd year in a row where usage has outpaced production. This reality is captured in the U.S. soybean stocks/use ratio which is now back at decade lows. An ever tighter balance sheet show be supportive for prices moving forward."

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