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USDA projects higher soybean yield, lower demand

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 1.388 billion bushels vs. the trade estimate of 1.383 billion bushels. USDA’s estimate in July was much higher at 1.470 billion bushels.

For soybeans, the U.S. ending stocks were 245 million bushels vs. the trade's expectation of 227 million bushels. USDA’s July estimate was 230 million bushels. 

In its report, the USDA pegged the U.S. wheat ending stocks at 610 million bushels vs. the trade’s expectation of 651 million. Today’s estimate is a big step down from July’s estimate of 639 million bushels.

2021/2022 U.S. Ending Stocks

For corn, the USDA pegged the U.S. 2021/22 projected ending stocks at 1.530 billion bushels vs. the trade estimate of 1.518 billion bushels and the July USDA estimate of 1.510 billion bushels.

For soybeans, the U.S. ending stocks were 225 million bushels vs. the trade that expected the USDA to print 228 million bushels today. In July, the USDA’s estimate was 215 million bushels.

In its report, the USDA pegged the U.S. wheat ending stocks at 660 million bushels, matching the trade’s expectation and reflecting no change from the July estimate.

2022/2023 World Ending Stocks

On Friday, the USDA pegged the world’s corn ending stocks at 306.7 mmt., below the trade’s expectation of 309.8 mmt. and below USDA’s July estimate of 312.9 mmt.

For soybeans, the world ending stocks are estimated at 101.4 mmt. vs. the trade’s expectation of 99.2 mmt. and 99.6 mmt last month.

For wheat, the USDA pegged world ending stocks at 267.3 mmt., slightly below the trade’s expectation of 267.8 mmt. and the July estimate of 267.5 mmt.

2021/2022 World Ending Stocks

For 2021/2022 USDA pegged the world’s corn ending stocks at 311.8 mmt. vs. the trade’s expectation of 313.3 mmt. and the USDA’s July estimate of 312.3 mmt.

For soybeans, the world ending stocks are estimated at 89.7 mmt. vs. the trade’s expectation of 88.9 mmt. and the USDA’s July estimate of 88.7 mmt.

For wheat, the USDA pegged world ending stocks at 276.4 mmt. vs. the trade’s expectation of 280.1 mmt. and the USDA’s previous estimate of 280.1 mmt.

2021/2022 World Crop Production

On Tuesday, the USDA pegged the 2021 Brazilian soybean production at 126.0 mmt, reflecting no change from USDA’s estimate the last two months of 126.0 mmt. 

For corn, Brazil’s output is seen at 116.0 mmt., reflecting no change from the last two months of 116.0 mmt.

For Argentina’s soybean output, the USDA pegged its crop at 44.0 mmt., reflecting no change from USDA’s July estimate of 44.0 mmt. 

Argentina’s 2021/2022 corn crop is pegged at 53.0 mmt, reflecting no change from the USDA’s two previous estimates of 53.0 mmt. 

Planted Acres Adjustment

On Friday, the USDA adjusted projected planted acres for 2022/2023 corn, soybeans, and wheat. 

Excessive rainfall this spring in Minnesota, North Dakota, and South Dakota led to delays in planting. When the National Agricultural Statistics Service (NASS) originally surveyed planted acres, corn left to be planted in the U.S. was 4.03 million acres. Soybeans left to be planted were 15.8 million acres. 

In July NASS re-surveyed these three states. Corn acres planted is now projected to 89.8 million acres, slightly down from the July projection of 89.9 million acres. Soybean planted acres are now projected to 88.0 million acres, down from the July estimate of 88.3 million acres. Planted acres of wheat are now projected to be 47.0 million acres, compared with the July estimate of 47.1 million acres. 

More From USDA

“This month’s 2022/23 U.S. corn outlook is for lower supplies, reduced feed and residual use, slightly higher food, seed, and industrial use, smaller exports, and lower ending stocks,” says USDA in the report. “U.S. soybean supply and use changes for 2022/23 include higher beginning stocks, production, exports, and ending stocks. Beginning soybean stocks are raised on lower 2021/22 exports. Soybean production for 2022/23 is forecast at 4.53 billion bushels, up 26 million with higher yields more than offsetting lower harvested area." 

Trade Reaction

Jake Hanley of Teucrium Funds calls the report neutral to bearish for soybeans and bullish for corn. 

"Still, one could argue that the USDA is being too aggressive with their soybean yield estimate," he says. "The USDA is reduced global corn ending stocks by more than 6 mmt. With a global carry-out of 306.68 mmt. versus last year's 311.84 the global balance sheet is tightening!"

He calls wheat the wild card. 

"The USDA increased Ukraine export estimates by 1 mmt," he says. "We’ll have to see how that plays out.  Either way with a carry-out of 267.34 mmt., global wheat ending stocks are projected to decline once again. Overall, the globe is continuing to use more grain that it produces. The world is going to have to get used to higher food prices for some time."

 

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