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USDA drops South America’s soybean output

U.S. ending stocks rise for corn and soybeans.

The USDA released no game changers in its February Supply/Demand and WASDE reports Wednesday.

However, the CME Group’s farm markets shook off the data and closed stronger.

At the close, the March corn futures finished 14½¢ higher at $6.46¾. May futures ended 12¾¢ higher at $6.46. December futures ended 6¼¢ higher at $5.88. 
 
March soybean futures settled 25¾¢ higher at $15.94. 

May soybean futures closed 23¢ higher at $15.95. New-crop November soybean futures ended 24½¢ higher at $14.37.

March wheat futures ended 6¼¢ higher at $7.85.

March soymeal futures settled $7.80 per short ton higher at $461.90. 

March soy oil futures closed 0.75¢ higher at 64.10¢ per pound.

In the outside markets, the crude oil market is $0.12 per barrel higher at $89.48, the U.S. dollar is lower, and the Dow Jones Industrials are 331 points higher (+0.94%) at 35,794.

2021/2022 WORLD CROP PRODUCTION

On Wednesday, the USDA pegged the 2021 Brazilian soybean production at 134.0 mmt vs. the USDA’s estimate last month of 139.0 mmt. and the trade’s expectation of 133.0 mmt.

For corn, Brazil’s output is seen at 114.0 mmt. vs. the trade’s expectation of 113.1 mmt. and the USDA’s January estimate of 115.0 mmt.

For Argentina’s soybean output, the USDA pegged its crop at  45.0 mmt. vs. the USDA’s January estimate of 46.5 mmt. and the trade's expectation of 44.0 mmt.

Argentina’s 2020/2021 corn crop is pegged at 54.0 mmt vs. the USDA’s previous estimate of 54.0 mmt. and the trade’s expectation of 52.0 mmt.

2021/2022 U.S. Ending Stocks

For corn, the USDA pegged the U.S. new-crop ending stocks at 1.54 billion bushels vs. the trade estimate of 1.51 billion bushels and the January estimate of 1.54 billion bushels.

For soybeans, the U.S. ending stocks were 325 million bushels vs. the trade that expected the USDA to print 310 million bushels today. In January, the USDA’s estimate was 350 million.

In its report, the USDA pegged the U.S. wheat ending stocks at 648 million bushels vs. the trade’s expectation of 629 million and compared with the January estimate of 628 million bushels.

2021/2022 World Ending Stocks

On Wednesday, the USDA pegged the world’s corn ending stocks at 302.2 mmt. vs. the trade’s expectation of 300 mmt. and the USDA’s January estimate of 303.4 mmt.

For soybeans, the world ending stocks are estimated at 92.8 mmt. vs. the trade’s expectation of 91.0 mmt. and the USDA’s January estimate of 95.2 mmt.

For wheat, the USDA pegged world ending stocks at 278.2 mmt. vs. the trade’s expectation of 279.8 mmt. and the USDA’s previous estimate of 279.9 mmt.

Trade Reaction

Sal Gilbertie, Teucrium Trading, says that the USDA offered very little news.

“The markets have had almost no discernible price reaction post-report with no surprises at all from the USDA. All that’s left to do is see how the soybean/corn price ratio plays out over the next several weeks to see what planting decisions farmers will make this spring,” Gilbertie says.

Jason Roose, U.S. Commodities, says that the farm markets still have some support, despite the USDA not offering big surprises.

“Grains are trading cautiously firm after today’s monthly U.S. and world production report. U.S. corn demand was unchanged from January, leaving ending stocks unchanged at 1.54 billion bushels. Soybean crush increased by 25 mln, which lowered ending stocks to 325 mln down from January. Brazil and Argentina’s soybean production numbers were both lowered slightly, with possible adjustments next month. Lower China bean imports, U.S. weather, and the energy markets will be the focus in a market that has been dominated by South America weather,” Roose says.

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