USDA released its monthly World Agricultural Supply and Demand Estimates (WASDE) report.
USDA lowered corn ending stocks for the 2020-21 crop by 95 million bushels (mb) to 1.257 billion bushels (bb), reflecting 100 (mb) increase in export demand. John Heinberg with Total Farm Marketing says however, the market has been trading like the old crop stocks are already below 1.0 (bb). “I think the corn market acts like we are around 800 (mb) for stocks and end users like ethanol plants have been scrambling which has been reflected with cash basis levels remaining on fire.” He says if the weather stays dry it is possible corn could take out the high in 2013 around $8.43 on the old crop futures.
For the new-crop USDA pegged corn production at 14.99 (bb) based on a 179.5 bushel per acre yield and the 91.1 million acreage projection from the USDA Prospective Plantings Report. That put new-crop ending stocks at 1.507 (bb), which was above expectations.
The corn market was also watching the production estimates out of South America, in particular Brazil, which has been experiencing drought amid its second crop season. USDA lowered production 5 million metric tons (mmt) to 102 (mmt).
USDA sees tight soybean stocks continuing into the 2021-22 crop year. The agency left old-crop stocks unchanged at 120 (mb), while providing only a slight increase to the new-crop balance sheet at 140 (mb). New crop production came in close to estimates at 4.405 (bb) with a yield of 50.8 bushels per acre and acreage of 86.7 million.
Heinberg says old-crop soybean prices are at levels not seen since the drought in 2012 and at this rate could easily eclipse those prices with the end user demand pushing cash basis levels to record levels as well. Processors are scrambling for the last remaining bushels of soybeans before the next crop comes to market.
U.S. wheat production was pegged at 1.872 (bb), while winter wheat was above expectations at 1.283 (bb). Old-crop ending stocks were 20 (mb) above last month at 872 (mb), while new-crop was higher than expected at 774 (mb). World ending stocks were close to April on the old-crop offering at 295 (mmt), but below trade guesses for the 2021-22 crop at 295 (mmt).
