USDA Lowers Soybean Ending Stocks in December WASDE--Allendale's Rich Nelson Gives Analysis on the Latest NumbersThu, 10 Dec 2020 18:53:19 CST
The Decemer World Agricultureal Supply and Demands came out today and Allendale's Rich Nelson said this report was a little bit disapointing, "On the Corn side of things USDA did leave ending stocks unchanged at 1.702 billion bushels from last month, that was more or less expected for the most part, keep in mind USDA did lower the Argentine corn crop just a small amount, about 1 million tons due to the early dryness. And as far as the soybean side, this is where the disappoinment really hits in. USDA did lower stocks from 190 million bushels to now 175, but the drop in stocks came from the increased domestic crush, not the hot button issue as far as exports." To hear the complete commentary with Allendale's Rich Nelson on the December Wasde, click or tap below.
USDA lowered soybean ending stocks to 175 million bushels (mb), a 15 mb decline from last month's report, which is completely attributable to an increase in domestic crush.
You can also access the full reports here:
-- Crop Production: click here:
-- World Agricultural Supply and Demand Estimates (WASDE)
Production for the 2020-21 marketing year was left unchanged at 4.17 billion bushels (bb) with a national average yield of 50.7 bushels per acre (bpa). All demand categories, except for crush, were unchanged. The forecast for domestic crush was increased by 15 mb "on strong crush margins and record early season crush." If realized, the domestic ending stocks forecast of 175 mb would be the lowest since the 2013-14 marketing year.
USDA increased the average farm gate price by 15 cents to $10.55 per bushel.
Global ending stocks for 2020-21 declined by less than a million metric tons (mmt) to 85.64 mmt. USDA said higher soybean crop estimates in Canada and Uruguay offset lower production in Argentina, which was trimmed by 1 mmt on lower harvest area. USDA anticipated Argentina will produce 50 mmt of soybeans, while Brazil will grow 133 mmt, which is unchanged from last month. The estimate of China's import needs -- 100 mmt -- was unchanged from last month.
The December corn numbers offered no surprises because there were no domestic changes from the November report. Globally, USDA raised Chinese imports by 3.5 mmt and lowered overall global ending stocks for the 2020-21 crop.
USDA maintained the average corn yield to 175.8 bpa. Harvested acres came in at 82.5 million acres. Corn production for 2020-21 is pegged at 14.507 bb.
That puts total supply at 16.527 bb. On the demand side, feed and residual use are projected at 5.7 bb. Ethanol demand remained at 5.05 bb.
Exports for the 2020-21 corn crop are forecast at 2.65 bb. If realized, that would be a record high for U.S. corn exports, USDA stated.
Total use was forecast at 14.825 bb. That puts corn ending stocks for the 2020-21 crop at an estimated 1.702 bb. The stocks-to-use ratio for corn came it at 11.48%.
The average farm price for the 2020-21 corn crop was posted at $4.00 a bushel.
Globally, USDA raised corn exports overall 1.2 mmt to 185.97 mmt. USDA raised exports for Ukraine, but lowered corn exports for the European Union.
Globally, USDA also raised Chinese corn imports to 16.5 million metric tons, up from 3.5 mmt from November.
Global corn ending stocks for 2020-21 are reduced, 2.47 mmt to 288.96 mmt, mostly due to reduction for India, Brazil, Canada, Ukraine and Egypt.
Wheat production for 2020-21 in the U.S. remained pegged at 1.83 bb, with an average yield of 49.7 bpa, unchanged from the November report.
U.S. ending stocks for the 2020-21 wheat crop were trimmed 15 mb to 862 mb, on the lower side of pre-report estimates. USDA tightened supply estimates by 5 mb, and exports increased by 10 mb.
The average U.S. farm-gate price was left unchanged from November $4.70 per bushel.
World wheat ending stocks for 2020-21 were dropped beyond pre-report expectations to 316.50 mmt, down 3.9 mmt, driven largely by an increase in feed and residual use for China, Australia and the EU. Nonetheless, ending stocks remain record high, with China and India holding 51% and 10% of the total, respectively, USDA noted.
Global wheat production set a new record at 773.66 mmt, with Australia's wheat production bumped up to 30 mmt, up from 28.5 mmt estimated in November.
Annual beef and pork production increased slightly from last month's estimate, with beef production at 27.23 billion pounds, increasing 15 million pounds for the year. Pork production posted the most increase, moving to 28.3 billion pounds, after a gain of 155 million pounds in the latest estimate. This also boosted first quarter 2021 production estimate levels, although overall year-end estimates for both beef and pork slipped slightly from last month's projections. Total poultry production also slipped in 2020 and 2021 estimates, creating the potential for increased focus on red meat demand over the coming months.
Cattle prices were adjusted $0.25 per cwt lower for the year but elevated $1 per cwt for 2021 based on current production and price pressure limiting current market support, but tightening supplies through the second half of 2021. Pork prices shifted higher $0.25 per cwt, as current pork demand remains firm, while hog prices are unchanged for 2021.
Beef and pork exports were also shifted higher from last month's report, limiting the gains in beef ending stocks. The production gains in pork production offset the higher pork export estimates, allowing for pork ending stocks to increase by 100 million pounds for the 2020 year.
Expected exports for beef and pork are projected to increase slightly in 2021, still maintaining the positive support from firm domestic demand and growing export market exposure. Even with the adjustments seen in the latest report, these moves are not expected to have a significant impact on short-term price moves in either the lean hog or live cattle futures complex.
(source DTN via USDA)
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