USDA’s global data supports soybean market
While the U.S. 2021 corn and soybean crop estimates remain unchanged, this year’s Brazil soybean crop is getting smaller, according to the USDA.
On Wednesday, the USDA released its January Supply/Demand, WASDE, and Quarterly Grain Stocks reports.
As a result, the CME Group’s soybean market moved lower then turned higher, corn lower, and wheat lower.
At the close, the March corn futures finished 2¢ lower at $5.99. May futures closed 1 3/4¢ lower at $6.00. July corn futures ended 2¢ lower at $5.98.
March soybean futures closed 12 3/4¢ higher at $14.08.
May soybean futures ended 12 3/4¢ higher at $14.13. New crop November soybean futures ended 12 3/4¢ higher at $13.12.
March wheat futures closed 13 1/4¢ lower at $7.57.
March soymeal futures closed 3.10 per short ton higher at $416.20.
March soy oil futures settled 0.50 of a cent higher at 59.37 per pound.
In the outside markets, the crude oil market is $1.71 per barrel higher at $82.93 the U.S. Dollar is lower, and the Dow Jones Industrials are 17 points higher (+0.05%) at 36,269.
U.S. 2021/22 CROP PRODUCTION
In its report, the USDA pegged the U.S. corn production at 15.11 billion bushels (second highest on record) vs. the trade’s expectation of 15.06 billion and the previous estimate of 15.06 billion bushels.
The U.S. corn yield average was pegged at 177.0 bushels per acre vs. the trade’s expectation of 177 bushels per acre and the USDA’s previous estimate of 177.0.
For soybeans, the USDA pegged output at 4.43 billion bushels, a new all-time high with 21 states reporting record-high yields. The trade’s expectation was 4.4 billion vs. the government’s November estimate of 4.42.
For yield, the soybean average is pegged at 51.4 bu./acre vs. the trade’s expectation of 51.3 bu./acre and the government’s previous estimate of 51.2.
USDA pegged the U.S. 2022 winter wheat plantings at 34.3 million vs. the trade’s expectation of 34.2 million acres.
2021/2022 WORLD CROP PRODUCTION
On Wednesday, the USDA pegged the 2021 Brazilian soybean production at 139.0 mmt vs. the USDA’s estimate last month of 144.0 mmt. and the trade’s expectation of 141.6 mmt.
For corn, Brazil’s output is seen at 115 mmt. vs. the trade’s expectation of 116.1 mmt. and the USDA’s December estimate of 118.0 mmt.
For Argentina’s soybean output, the USDA pegged its crop at 46.5 mmt. vs. the USDA’s December estimate of 49.5 mmt. and the trade's expectation of 48.11 mmt.
Argentina’s 2020/2021 corn crop is pegged at 54.0 mmt vs. the USDA’s previous estimate of 54.5 mmt. and the trade’s expectation of 53.5 mmt.
2021/2022 U.S. Ending Stocks
For corn, the USDA pegged the U.S. new-crop ending stocks at 1.54 billion bushels vs. the trade estimate of 1.47 billion bushels and the December estimate of 1.49 billion bushels.
For soybeans, the U.S. ending stocks were 350 million bushels vs. the trade that expected the USDA to print 348 million bushels today. In December, the USDA’s estimate was 340 million.
In its report, the USDA pegged the U.S. wheat ending stocks at 628 million bushels vs. the trade’s expectation of 608 million and compared with the December estimate of 598 million bushels.
2021/2022 World Ending Stocks
On Wednesday, the USDA pegged the world’s corn ending stocks at 303 mmt. vs. the trade’s expectation of 304 mmt. and the USDA’s December estimate of 305.4 mmt.
For soybeans, the world ending stocks are estimated at 95.2 mmt. vs. the trade’s expectation of 99.9 mmt. and the USDA’s December estimate of 102.0 mmt.
For wheat, the USDA pegged world ending stocks at 280 mmt. vs. the trade’s expectation of 278.5 mmt. and the USDA’s previous estimate of 278.1 mmt.
Quarterly Grain Stocks
For corn, the USDA printed stocks as of Dec. 1 at 11.6 billion bushels vs. the trade’s expectation of 11.6 billion bushels.
For soybeans, the USDA pegged the quarterly grain stocks at 3.14 billion bushels vs. the trade’s expectation of 3.1 billion bushels.
The USDA sees the U.S. wheat quarterly grain stocks at 1.39 billion bushels vs. the trade’s expectation of 1.40 billion bushels.
In its report, the USDA pegged the U.S. 2021 corn harvested acreage at 85.4 million vs. the trade's expectation of 85.0 and the NASS November estimate of 85.08 million.
For soybeans, the U.S. 2021 harvested acreage is pegged at 86.3 million vs. the trade's expectation of 86.4 and the NASS's November estimate of 86.4 million.
USDA pegged the U.S. 2022 winter wheat plantings at 34.3 million vs. the trade's expectation of 34.2 million acres.
Peter J. Meyer, S&P Global Platt’s head of grain and oilseed analytics, says that USDA offered very little new information.
“Pretty ho-hum report. In some ways it should have been expected as planting and harvest was early last year, so the data that NASS collected was more mature by November than usual. Cuts to South American production forecast were expected, so nothing new there either. For now, we need to keep an eye on weather in Brazil and Argentina because the USDA didn’t give us anything new today,” Meyer says.
Sal Gilbertie, Teucrium Trading, says that the USDA offered very little news.
“Not really any surprises other than official confirmation that wheat is pricing itself out of feed rations. Slightly tighter soybean numbers than expected seems to be supporting the soybean markets for the time being. South American weather will continue to be the focus of traders for the next several weeks,” Gilbertie says.
Jason Roose, U.S. Commodities, says that today's report shows that there is price floor support in the bean market.
“Grains continue to look for direction before and after the well anticipated January USDA crop report. Corn and soybean production was increased along with a slight increase in yield for soybeans from the December report. Corn exports were lowered by 75 mln bushels but were offset by an increase in ethanol demand. World corn ending stocks were dropped 2.4 mln tns and world soybean ending stocks were lowered almost 7 mln tns. This is keeping price premium with potential future South American crop weather issues," Roose says.
Jack Scoville, PRICE Futures Group, says that the USDA numbers didn't shakeup the market.
"The corn production was up a little and I had thought it would be down a little. The Brazil and Argentina corn numbers could have been cut more. Demand could have been stronger. All in all, not the corn numbers I was looking for. Beans on the other hand had demand hold up pretty well and production was fine. The Brazil and Argentina estimates were down a lot and that's ok with me, for now. The wheat estimates are pretty bearish across the board, not much at all for any bullish trader to go after there. But, maybe wheat is cheap enough now," Scoville says.