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329201

USDA sees smaller soybean stocks for old and new crops

WASDE report projects higher corn use but also higher stocks.

Friday’s World Agricultural Supply and Demand Estimates (WASDE) show a drop in both old and new crop U.S. ending soybean stocks compared to a month ago and trade expectations. World soybean ending stocks were increased slightly.

The USDA’s U.S. corn outlook is for larger beginning stocks, slightly higher use, and increased ending stocks.

2021/2022 WORLD CROP PRODUCTION

On Friday, the USDA pegged the 2021 Brazilian soybean production at 126.0 mmt vs. the USDA’s estimate last month of 125.0 mmt. and the trade’s expectation of 124.8 mmt.

For corn, Brazil’s output is seen at 116.0 mmt. vs. the trade’s expectation of 114.6 mmt. and the USDA’s May estimate of 116.0.0 mmt.

For Argentina’s soybean output, the USDA pegged its crop at 43.4 mmt. vs. the USDA’s May estimate of 42.0 mmt. and the trade’s expectation of 42.2 mmt. Argentina’s 2020/2021 corn crop is pegged at 53.0 mmt vs. the USDA’s previous estimate of 53.0 mmt. and the trade’s expectation of 52.2 mmt.

2021/2022 U.S. Ending Stocks

For corn, the USDA pegged the U.S. 2021-22 projected ending stocks at 1.485 billion bushels vs. the trade estimate of 1.438 billion bushels and the May estimate of 1.44 billion bushels.

For soybeans, the U.S. ending stocks were 205 million bushels vs. the trade that expected the USDA to print 217 million bushels today. In May, the USDA’s estimate was 235 million bushels.

In its report, the USDA pegged the U.S. wheat ending stocks at  655 million bushels vs. the trade’s expectation of 661 million and unchanged from the May estimate of 655 million bushels.

2022/2023 U.S. Ending Stocks

For corn, the USDA pegged the U.S. 2022-23 projected ending stocks at 1.400 billion bushels vs. the trade estimate of 1.337 billion bushels. USDA’s estimate in May was 1.360 billion bushels.

For soybeans, the U.S. ending stocks were 280 million bushels vs. the trade that expected the USDA to print 295 million bushels today and 310 million bushels in May. 

In its report, the USDA pegged the U.S. wheat ending stocks at 627 million bushels vs. the trade’s expectation of 622 million and 619 million bushels last month. 

2021/2022 World Ending Stocks

On Thursday, the USDA pegged the world’s corn ending stocks at 210.9 mmt. vs. the trade’s expectation of 308.9 mmt. and the USDA’s May estimate of 309.4 mmt.

For soybeans, the world ending stocks are estimated at 86.2 mmt. vs. the trade’s expectation of 85.0 mmt. and the USDA’s May estimate of 85.2  mmt.
For wheat, the USDA pegged world ending stocks at 279.4 mmt. vs. the trade’s expectation of 278.9 mmt. and the USDA’s previous estimate of 279.7 mmt.

2022/2023 World Ending Stocks

On Friday, the USDA pegged the world’s corn ending stocks at 31040 mmt. vs. the trade’s expectation of 305.0 mmt. USDA’s May estimate was 305.1 mmt.

For soybeans, the world ending stocks are estimated at 100.5 mmt. vs. the trade’s expectation of 99.8 mmt. and 99.6 mmt last month.

For wheat, the USDA pegged world ending stocks at 266.9 mmt. vs. the trade’s expectation of 267.6 mmt. and 267.0 mmt. in May.

More from USDA

According to today's WASDE report summary, "This month’s U.S. soybean supply and use projections for 2022/23 include lower beginning and ending stocks and higher prices. Lower beginning stocks reflect increased exports for 2021/22. Soybean exports for 2021/22 are raised 30 million bushels to 2.17 billion reflecting strong export sales and a reduced export forecast for Brazil.”

Trade Reaction

“The USDA raised the 2021/2022 exports for soybeans, which means lower beginning stocks for 2022/2023 domestically," says Jake Hanley of Teucrium Funds. "The USDA is still expecting year-over-year build in us soybean ending stocks, but the result is a tighter stocks/use ratio relative to the may report - bullish for beans but, that appears to have been priced in over the past week or so.

"U.S. corn ending stocks revised up by 40 million bushels largely reflecting lower 2021/2022 exports. . . Not much of a story there, as U.S. corn ending stocks are still expected to decline year over year, and the stocks/use ratio is still under 10% (i.e. very tight historically),” Hanley adds.

As for wheat, it's interesting to note an increase in Ukraine 2022/2023 wheat production and a slight decrease in exports resulting in an approximate 4 mmt increase in ending stocks vs. the may report. "Wheat markets will likely continue to grapple with supplies showing up on the balance sheet, but logistical issues (i.e. war/supply chain) are making it difficult to bring the wheat to market,” Hanley says.

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