USDA data seen as market-negative for corn and soybeans
The U.S. corn, soybean yields and production estimates jump slightly, as the trade expected.
As a result, the corn, soybean markets dropped, following today’s release of the USDA Supply/Demand and WASDE Reports.
At the close, the Dec. corn futures finished 10 1/2¢ lower at $5.22 1/2. March futures ended 10 1/4¢ lower at $5.32. May corn futures closed 10¢ lower at $5.37.
November soybean futures closed 30¢ lower at $11.98.
Jan. soybean futures settled 29 1/4¢ lower at $12.10. March soybean futures closed 29 1/4¢ lower at $12.20.
Dec. wheat futures ended 2 3/4¢ higher at $7.34.
Dec. soymeal futures closed $4.10 per short ton lower at $313.00.
Dec. soy oil futures closed 1.66 of a cent lower at 58.85 per pound.
In the outside markets, the NYMEX crude oil market is 0.08 higher (+0.10%) at $80.60. The U.S. dollar is higher, and the Dow Jones Industrials are 30 points lower (-0.09%) at 34,466 points.
U.S. 2021/22 CROP PRODUCTION
In its report, the USDA pegged the U.S. corn production at 15.01 billion bushels vs. the trade’s expectation of 14.9 billion and the previous estimate of 14.99 billion bushels.
The U.S. corn yield average was pegged at 176.5 bushels per acre vs. the trade’s expectation of 176 bushels per acre and the USDA’s previous estimate of 176.3.
For soybeans, the USDA pegged output at 4.44 billion bushels vs. the trade’s expectation of 4.4 billion and the government’s September estimate of 4.37.
For yield, the soybean average is pegged at 51.5 bu./acre vs. the trade’s expectation of 51.1 bu./acre and the government’s previous estimate of 50.6.
2020/2021 U.S. ENDING STOCKS
For corn, the USDA pegged the U.S. old-crop ending stocks at 1.23 billion bushels vs. the trade estimate of 1.18 billion bushels and the USDA’s September estimate of 1.18 billion.
For soybeans, the U.S. ending stocks were 175 million bushels vs. the September estimate of 175 million bushels.
2021/2022 U.S. Ending Stocks
For corn, the USDA pegged the U.S. new-crop ending stocks at 1.5 billion bushels vs. the trade estimate of 1.43 billion bushels and the September estimate of 1.40 billion bushels.
For soybeans, the U.S. ending stocks were 320 million bushels vs. the trade that expected the USDA to print 300 million bushels today. In September, the USDA’s estimate was 185 million.
In its report, the USDA pegged the U.S. wheat ending stocks at 580 million bushels vs. the trade’s expectation of 576 million and compared with the September estimate of 615 million bushels.
2021/2022 World Ending Stocks
On Tuesday, the USDA pegged the world’s corn ending stocks at 301.7 mmt. vs. the trade’s expectation of 298.76 mmt. and the USDA’s September estimate of 297.6 mmt.
For soybeans, the world ending stocks are estimated at 104.6 mmt. vs. the trade’s expectation of 100.7 mmt. and the USDA’s September estimate of 98.9 mmt.
For wheat, the USDA pegged world ending stocks at 277.2 mmt. vs. the trade’s expectation of 280.82 mmt. and the USDA’s previous estimate of 283.2 mmt.
Sal Gilbertie, Teucrium Trading, says that higher soybean supplies and lower wheat supplies vs. expectations were the highlights of today’s WASDE.
“Wheat’s balance sheet continues to tighten both globally and domestically, while higher-than-expected government estimates for soybean stocks again surprised markets for the second time in as many weeks. By and large, the numbers were widely anticipated, which is why today’s markets have little reaction to the report,” Gilbertie says.
PJ Quaid, RJ O’Brien broker, says that after today’s USDA report is digested, investors will look ahead to South America’s planting weather.
“USDA lowered the U.S. feed and residual amounts for corn, but raised exports.
“The (USDA’s) harvested acres are the same as September. I don’t think the farmer sells (crops). The world wheat stocks were friendly. South American weather is good, so that will be hanging over our markets for the next few weeks,” Quaid says.
Jack Scoville, PRICE Futures Group, says that today’s report is especially bearish for the soybean market.
“USDA modified the yields and left beans and corn yields higher than the trade expectations. As a result, that made for higher production and ending stocks than predicted. The numbers seem high, to me, but USDA yields always seem that way. The seed technology is really something. Beans had the biggest percentage change and are feeling the heat, corn not so much. There’s not much of a reaction after the initial sell-off. Wheat data is bullish, with reduced production and ending stocks here and around the world,” Scoville says.