USDA releases expected corn ending stocks, creating little market reaction

For 2020/2021 marketing year, corn ending stocks are significantly high.

INDIANOLA, Iowa — The U.S. corn pile is growing but not as large as expected, at least for this marketing year, the USDA reported Tuesday.

In its May Supply/Demand and WASDE Reports, the USDA pegged this year’s U.S. corn average yields at 178.5 bushels per acre. If realized it would produce a crop size of 15.995 billion bushels.

Because the USDA released corn numbers that have already been built into the market, the corn prices didn’t have much of a reaction to the new data.

At the close, the July corn futures finished 3 3/4¢ higher at $3.22 3/4. Dec. corn futures settled 1¢ higher at $3.35 1/4.
 
July soybean futures closed 3¢ lower at $8.52. November soybean futures closed 1 1/2¢ lower at $8.57.

July wheat futures settled 2 3/4¢ lower at $5.14 1/2. 

July soymeal futures ended $1.80 per short ton higher at $292.10. July soy oil futures closed 0.23 cent lower at 26.26¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.65 per barrel higher at $25.79 per barrel, the U.S. dollar is lower, and the Dow Jones Industrials are 338 points lower.

U.S. Ending Stocks

On Tuesday, the USDA  pegged the U.S. corn old-crop ending stocks at 2.098 billion bushels vs. the trade’s expectations of 2.22 billion bushels and the government's April estimate of 2.092 billion. 

New-crop U.S. corn ending stocks are estimated at 3.318 billion bushels vs. the trade’s expectations of 3.38 billion bushels.

For U.S. soybeans, the 2019/2020 ending stocks are estimated at 580 million bushels compared with the trade’s expectations of 488 million bushels and the USDA's April estimate of 480 million. 

For the 2020/2021 marketing year, new-crop soybean ending stocks are pegged at 405 million bushels vs. the trade’s expectations of 430 million bushels.

For wheat, the U.S. old crop (2019/2020) ending stocks are pegged at  978 million bushels vs. the trade’s expectations of 969 million bushels and the USDA's April estimate of 970 million. 

For the 2020/2021 marketing year, new-crop wheat estimates are 909 million bushels vs. the trade’s expectations at 814 million.

U.S. Wheat Production

In its report Tuesday, the USDA pegged the U.S. 2020/2021 All Wheat output at 1.866 billion bushels vs. the trade’s estimate of 1.847 billion bushels.

World Ending Stocks

On Tuesday, the WASDE Report pegged the 2019/2020 world corn ending stocks at  314.7 million metric tons vs. the trade’s expectation of 305.74 mmt. and the USDA’s April estimate of 303.17 mmt.

For new-crop ending stocks, the 2020/2021 corn supply is pegged at  339.6 mmt. vs. the trade’s expectation of 319.56 mmt. 

For soybeans, the world’s old-crop ending stocks is pegged at 100.3 mmt. vs. the trade’s expectations of 99.73 mmt. and the USDA’s April estimate of 100.45 mmt.

In 2020/2021, the USDA sees  the world soybean ending stocks at 98.4 mmt. vs. the trade’s expectations of 104.04 mmt. 

In its report Tuesday, the USDA estimated the world’s old-crop wheat ending stocks at  295.1 mmt. vs. the trade’s expectation of 292.33 mmt. vs. the USDA’s April estimate of 292.78 mmt.

For 2020/2021, the USDA sees the world’s wheat ending stocks at 310.1 mmt. vs. the trade’s expectations of 292.52 mmt.

World Production

On Tuesday, the USDA pegged Brazil’s 2019/2020 soybean crop at 124.0 mmt. vs. the trade’s expectation of 123.13 mmt. and the USDA’s April estimate of 124.50 mmt.

Brazil’s corn crop is estimated at 101.0 mmt. vs. the USDA’s April estimate of 101.00 mmt. and the trade’s expectation of 99.28 mmt.

For Argentina, the USDA pegged that country’s 2019/2020 soybean crop at  51.0 mmt. vs. the trade’s expectation of 51.36 mmt. and the USDA’s April estimate of 52.00 mmt.

Argentina’s 2019/2020 corn crop is pegged at 50.0 mmt.  vs. the trade’s expectation of 49.54 mmt. and the government’s April estimate of 50.00 mmt.

Trade Reaction

Jason Roose, U.S. Commodities, says that the May USDA Crop Report hopefully sets the tone for the year, as it did last year.

"With anticipation of large stocks, funds short, and no shortage of grain, demand was the key to this report. For the current crop year, ethanol usage was reduced but only by 100 million bushels and corn exports increased 50 million bushels.  But, for the 2020/2021, crop exports are anticipated to increase 375 million bushels. And, the USDA looks for an increase in ethanol demand. With an optimistic demand outlet on this report, the weather and Chinese purchases will set the tone until the June report," Roose says. 

Jack Scoville, PRICE Futures Group, says that today's reports are fair and in line with trade expectations.

“The cuts to old crop demand for Soybeans, Corn, and Wheat were expected as were the production increases for next year.  I have no argument with any of the numbers presented today.  The market feels that maybe the old crop corn is a bit bullish, but overall the market reaction has been rather muted due to the fact that these numbers are in line with the trade expectations and have been traded for a long time,” Scoville says.

Sal Gilbertie, Teucrium Trading, says that today’s WASDE was unexpectedly non-eventful.

“In corn, higher feeding offset some of the lost demand for ethanol, but overall trend line yields and confirmation of a huge 97 million acre U.S. planted corn number does little to change balance sheet expectations that were already in the market. Record global use of corn, soybeans and wheat for the coming 20/21 crop year is offset by projections of surplus production, leaving the future of forward prices again entirely at the mercy of weather. At this point, perfect production metrics are confirmed, and steady global grain consumption growth continues even with the effects of COVID-19 factored into the equation,” Gilbertie says.

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