USDA tightens the U.S. corn, soybean stockpiles

The corn market locked limit up.

The USDA dropped the U.S. corn, soybean ending stocks Tuesday. 

As a result, the CME Group’s corn market closed at its daily trade limit up at 25¢; soybeans up sharply higher, too.

At the close, the March corn futures finished 25¢ higher at $5.17¼, the daily limit. May corn futures settled 25¢ higher at $5.19. 
 
March soybean futures finished 45¾¢ higher at $14.18½. May soybean futures closed 43¾¢ higher at $14.13¾.

March wheat futures finished 30½¢ higher at $6.65¾. 

March soymeal futures closed $18.60 short term higher at $465.40.

March soy oil futures ended unchanged at 42.63¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.84 per barrel higher (+1.61%) at $53.09. The U.S. dollar is lower, and the Dow Jones Industrials are 68 points higher (+0.22%) at 31,077 points.

2020/2021 U.S. ENDING STOCKS

For corn, the USDA pegged the U.S. old-crop ending stocks at 1.55 billion bushels vs. the trade estimate of 1.59 billion bushels and the USDA’s December estimate of 1.70 billion.

For soybeans, the U.S. ending stocks were dropped from 175 million bushels in December to 140 million bushels. The trade expected the USDA to print 139 million bushels today.

READ MORE: Highest corn and soybean prices since commodity boom, says USDA

In its report, the USDA pegged the U.S. wheat ending stocks at 836 million bushels vs. the trade’s expectation of 859 million and the USDA’s previous estimate of 862 million.

U.S. Quarterly Grain Stocks

For corn, the USDA sees stocks, as of Dec.1 at 11.3 billion bushels vs. the trade’s expectation of 11.9 billion.

For soybeans, the USDA pegged Dec. 1 stocks at 2.93 billion bushels vs. the trade’s expectation of 2.982 billion.

For wheat, Dec. 1 stocks are pegged at 1.67 billion bushels vs. the trade’s expectation of 1.695 billion.

U.S. 2020/21 Crop Production

In its report, the USDA pegged the U.S. corn production at 14.1 billion bushels vs. the trade’s expectation of 14.47 billion and the previous estimate of 14.5 billion bushels.

The U.S. corn yield average was pegged at 172 bushels per acre vs. the trade’s expectation of 175 bushels per acre and the USDA’s previous estimate of 175.8.

Corn harvested acres were estimated at 82.5 million vs. the trade’s expectation of 82.5 million.

For soybeans, the USDA pegged output at 4.1 billion bushels vs. the trade’s expectation of 4.15 billion. 

For yield, the soybean average is pegged at 50.2  bu./acre vs. the trade’s expectation of 50.5 bu./acre and the government’s previous estimate of 50.7.

The U.S. 2020/21 soybean harvested acreage is estimated at 82.3 million acres vs. the trade’s expectation of 82.30 million.

U.S. Winter Wheat Plantings 

On Tuesday, the USDA pegged the wheat acres at 32.0 million vs. the trade’s expectation of 31.5 million.

2020/2021 WORLD ENDING STOCKS

On Tuesday, the USDA pegged the world’s corn ending stocks at 283 million metric tons (mmt.) vs. the trade’s expectation of  283.5 mmt. and the USDA’s December estimate of 288.9 mmt.

For soybeans, the world ending stocks are estimated at 84.31 mmt. vs. the trade’s expectation of 82.6 mmt. and the USDA’s December estimate of 85.64 mmt.

For wheat, the USDA pegged world ending stocks at  313.0 mmt. vs. the trade’s expectation of 315.3 mmt. and the USDA’s previous estimate of 316.5 mmt.

Trade Response

Sal Gilbertie, Teucrium Trading, says that the USDA’s numbers are definitely bullish.

“This is a bullish report, which was expected, but markets are reacting as if there is still some balance sheet tightening to come in future reports. Global usage of corn and soybeans is up, and production is not keeping up with supply, but right now market momentum seems to be what is pushing prices,” Gilbertie says.

Jason Roose, U.S. Commodities, says that today’s report was bullish for all categories for corn and soybeans, with a market that is already on a very impressive rally.

“Ending stocks continue to erode leading very little resistance to the upside. Soybean stocks were lowered from 175 million down to 140 million with strong demand and lower production. Corn was the surprise, with the drop in yield  3.8 bushels. That lowers production 325 million. Looking forword, the trade will have all eyes on South America’s weather, fund positioning, and the U.S. dollar,” Roose says.

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