Allendale's Rich Nelson Says WASDE Numbers Show Lower Ending Stocks for Corn and SoybeansTue, 09 Feb 2021 17:25:28 CST
In the latest WASDE report for February, USDA lowered ending stocks for corn and soybean with boosts in export sales for both crops.
U.S. corn ending stocks for the 2020-21 crop were pegged at 1.502 billion bushels (bb), down 50 million bushels (mb) from last month's estimate and coinciding with a 50 mb bump in corn exports. Soybean ending stocks were lowered 20 mb by USDA to 120 mb, also tied to a 20 mb increase in exports. Associate Farm Director, KC Sheperd spoke with Allendale's Rich Nelson said the trade wasn't expecting USDA to give us much to speak of regarding the new discussions on demand, and they really didnt. "We did notice on the corn side, stocks, lower than the 1.552 billion bushels to now 1.502. So they recognize about 50 million bushels on the corn side, as far as export sales."
Nelson says soybean numbers were not too bad, "So, the soybean numbers actually dropping from 140 to now 120 million bushels. Discussion for the soybean side is actually this easier, this implies stocks to use back to 2.6% is actually the lowest of any stocks to use number we've traded in modern history, during the marketing year. And it retests, the ending numbers posted for the 2013-2014 marketing year, so very tight supplies were recognized for soybeans."
Nelson says for Wheat, there weren't any big changes in today's report, "Keep in mind, though, we do have one week of good export sales behind us. So perhaps maybe those numbers might tighten up, maybe in some future reports."
To hear more from Rich Nelson at Allendale, click or tap below.
You can also access the full reports here:
-- Crop Production: https://www.nass.usda.gov/…
-- World Agricultural Supply and Demand Estimates (WASDE): http://www.usda.gov/…
Among the biggest moves in the report for corn was increasing China's corn imports by 6.5 million metric tons (mmt) to 24 mmt.
USDA held pat on yield for the 2020-21 corn crop at 172 bushels per acre (bpa) and maintained production at 14.182 bb.
USDA's main change in corn numbers for February was a 50 mb bump in exports, bringing exports to 2.6 bb. That lowered ending stocks by 50 mb to 1.502 bb.
Total use was increased by that 50 mb level to 14.625 bb. That brings the stocks-to-use ratio for the 2020-21 corn crop at 10.2%, down from 10.6% in last month's report.
The average farm price for the 2020-21 corn crop was increased 10 cents a bushel to $4.30 a bushel.
Globally, USDA increased production slightly to 1,134.05 mmt. USDA also increased exports by 2.07 mmt. Global stocks were increased 2.7 mmt to 286.53 mmt.
USDA held firm on Brazilian corn production at 109 mmt and maintained Argentina production at 47.5 mmt as well.
USDA also raised China's corn imports to 24 mmt, up from 17.5 mmt last month.
USDA lowered soybean ending stocks to 120 mb, a 20 mb decline from last month and within 1 bushel of the average pre-report estimate. The agency left the supply side unchanged. As for demand, the only change was in the export estimate, which USDA bumped up 20 mb to 2.250 bb. USDA says the change reflects record marketing-year exports through January as well as a slow start to Brazil's export season.
The national average farm gate price was left unchanged at $11.15 per bushel.
Globally, soybean ending stocks for the 2020-21 crop year came in at 83.36 mmt, a change that was just shy of 1 mmt from last month. USDA left Brazil and Argentina production unchanged at 133 mmt and 48 mmt, respectively. China's import estimate was also left unchanged at 100 mmt.
USDA left U.S. 2020-21 wheat production unchanged from the January report, at 1.826 bb and an average of 49.7 bpa. The agency also left wheat demand and use totally unchanged, with domestic ending stocks still sitting at 836 mb.
Farm gate prices were boosted slightly to $5.00 per bushel, up 15 cents from January.
In contrast, USDA dropped global wheat ending stocks 8.97 mmt to 304.22 mmt, well below analyst's pre-report expectations. That's despite a slight increase in global production, up 0.8 mmt to 773.44 mmt, based largely on higher production in Kazakhstan, which made up for lowered production in Pakistan and Argentina. Those higher supplies were offset by a 9.78 mmt increase in domestic use, mostly on higher feed and residual use for China and India, as well as a 1.06 mmt increase in exports.
Higher beef and pork production helped contribute to greater total forecast of red meat and poultry levels in 2021 based off Tuesday's WASDE Report. Beef production for 2021 was increased by 350 million pounds and pork production was increased by 145 million pounds, which ultimately pushed red meat and poultry levels to gain 500 million pounds for the anticipated 2021 production.
Beef production is expected to be the strongest throughout the first quarter of the year, which is largely contributed to swift slaughter speeds and elevated carcass weights. As the price of corn continues to rise, carcass weights are expected to lessen as the year goes on.
Tuesday's WASDE report shared that high production levels are expected for the pork industry throughout 2021, with the second quarter being the smallest and fourth quarter potentially being the most aggressive.
The report's quarterly price projections shared favorable news to both steer and barrow/gilt prices. In February 2020, steers were priced at $108.51, but in the February 2021 projections, steers are priced at $115.00 -- gaining $6.49 over a year ago. The same type of advancements were seen in the barrow/gilt prices; in February 2020 the market was set at $43.18, and now the February 2021 projection has barrows/gilts priced at $50.50, equating to a $7.32 gain over a year ago.
Beef exports grew by 55 million pounds, which is important for the beef industry as offsetting high production levels remains key for strong price levels.
Pork exports remained steady without any notable change.
To view all the Wasde numbers, click here:
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