Content ID

325093

USDA crop report analysis and historic perspective

The Wednesday, March 9, USDA World Agricultural Supply and Demand Estimates (WASDE) report came in close to pre-report estimates. The main interest in the report was the South American and global production estimates. The USDA usually does not make changes in their estimates as fast as private forecasters.

For the global production and supply-demand reports, I have learned not only look to at the reports compared to last month and last year, but to look at the reports compared to what the projections were in 2016 (when the commodity markets put in a major low) and 2020 (when the rally had just started).

Let's look at the numbers.

Global Corn

March

2019

March

2021

February

2022

March

2022

Ending stocks (million metric tons or mmt)

325

302

302

301

Stocks-to-use ratio

28%

25.6%

25.6%

25.4%

Global Soybeans

March

2019

March

2021

February

2022

March

2022

Ending stocks (million metric tons or mmt)

113

99.8

92.8

92

Stocks-to-use ratio

31.8%

24.6%

24.6%

24.2%

Global Wheat

March

2019

March

2021

February

2022

March

2022

Ending stocks (million metric tons or mmt)

278

288

278

281.5

Stocks-to-use ratio

38%

36.8%

36.8%

37.0%

I watch the numbers and the trade reaction, then try to anticipate changes that may show up the following month. The big challenge for the USDA (and private forecasters) is to factor in the size of the corn and wheat crops in Ukraine in 2022. The best case is for a corn crop that is down 75% from last year. This would take global ending stocks of corn down to 280 to 290 million metric tons in future reports. For wheat, I am factoring in a 50% reduction. That will take global wheat ending stocks down to 265 to 275 mmt. 

Bottom line: We are not going to run out of corn or wheat. The Ukraine is not a large soybean producer or exporter, but it is the world’s largest sunflower producer. A reduction in sunflower production would be bullish for soybean oil and, therefore, soybeans.

With all the hype and panic, it's good to know we will not run out of corn, soybeans, or wheat. However, end-users will be active buyers on any setback.

Planting Intentions 2022 Survey

Now get ready for the March 31, USDA Prospective Planting Report. Prior to the release of the report, Kluis Commodity Advisors and Successful Farming are teaming up to conduct their own acreage survey. You can complete the survey by clicking on Kluis Commodity Advisors and Successful Farming Planting Intentions Survey. You have until March 15 to complete the survey.

Once the survey is closed, Kluis Commodity Advisors will assemble the data and send participants the results as well as any potential trade recommendations we suggest before the release of the reports on March 31. This information is considered confidential and will not be shared with any third party.

Thank you for your participation!

About the author: Al Kluis has been trading grain futures since 1974. Sign up for a free trial to his daily morning email and weekly “Kluis Report” by visiting kluiscommodities.com.

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