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Agricultural News


Allendale's Rich Nelson Says USDA Increases Corn and Soybean Ending Stocks for 2021-22 in Latest WASDE

Wed, 12 Jan 2022 14:43:05 CST

Allendale's Rich Nelson Says USDA Increases Corn and Soybean Ending Stocks for 2021-22 in Latest WASDE The monthly World Agricultural Supply and Demand Estimates report was released today. This was released with the normal companion report, Crop Production. The next change to US production numbers comes on the January 12 Annual Production Summary. Farm Director, KC Sheperd spoke with Allendale's Rich Nelson and he said the numbers on this report were within reason, "One thing that does stand out is the US corn ending stock number raised from 1.493 billion to now 1.540 And that came was a good drop for export sales, which is actually surprising because we've been above the previous December numbers, so maybe a little disagreement with USDA's bearish looking corn stock number."

Nelson said Wheat also showed some interesting news, "USDA did recognize wheat export sales are a problem, so they raised US Wheat stocks. Also on this report, unique to the other markets we actually did see winter wheat plantings reported and really USDA's moderate 700,000 acre increase for Winter wheat plantings were relative with the trade expectations. So on most of these numbers, except for corn export sales, USDA's numbers meet the expectations here."

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USDA increased corn ending stocks in the 2021-22 crop by 47 million bushels (mb) to 1.54 billion bushels (bb) and increased soybean stocks by 10 mb to 350 mb on Wednesday.

USDA also showed a record corn yield in the 2021-22 crop at 177 bushels per acre (bpa), beating the 2017 record of 176.6 bpa.

USDA on Wednesday released a slew of numbers with the January World Agricultural Supply and Demand Estimates (WASDE), as well as the Quarterly Grain Stocks report for Dec. 1, Winter Wheat and Canola Seedings and Annual Crop Production.

You can also access the full reports here:

-- Crop Production:

-- World Agricultural Supply and Demand Estimates (WASDE):


Wheat: There was no change in the 2021 wheat harvest numbers. That is normal for wheat for this report. The quarterly count of old crop on December 1, 1.390 billion, was smaller than the 1.421 trade expectation. That would imply better than expected Sep Nov demand. Having said that good news, USDA lowered feed/residual by a large 25 million bushels. USDA's message is that wheat for feed in the second half of the marketing year will be low. Bears will note US wheat exports were lowered by 15 million and imports were also lowered by 10. The net message is US ending stocks, what will be left over on May 31, was raised from 598 to 628 million. That was over the 608 expectation. This balance sheet number would imply winter contracts at $7.50 and spring at $10.80. Wheat has a few issues in front of it to distort pricing beyond the balance sheet. This includes inflation, Russia/Ukraine concerns and poor US winter wheat conditions.

Corn: USDA increased the size of this fall's US harvest by 53 million bushels over the November estimate. Now at 15.115 billion, it was over the trade's 15.069 expectation. Yields were raised by 0.3 bpa to now 177.3. Acreage, due to the comingling of farm program data, increased by 53,000 for plantings and 303,000 for harvested from November.

The first of our demand discussions comes from the quarterly Grain Stock report. As of December 1, after one quarter of usage, we had 11.647 billion bushels of corn left over. That was slightly over the 11.602 trade expectation. This report is important for corn as it fills in the blank on the large category of unknown usage, Sep Nov feed/residual. With no surprises for December 1 stocks, USDA left their whole-year feed/residual estimate unchanged. Corn for ethanol was raised on this report by a strong 75 million bushels. That was within reason. Our year to date pace, Sep 1 Jan 7, is great at -0.5% from our 2018/19 model year pace. USDA's prior goal was to run -2.4% from 2018/19. Their new estimate is now -1.0% from 2018/19.

Soybeans: US production from this past fall was raised by a minor 10 million bushels to 4.435 billion. That was next to the 4.433 trade expectation. Yields were raised by 0.2 to 51.4 bpa. Acreage was lowered from November, -40,000 acres for planting and -104,000 for harvested. To hear more from Nelson on the Soybeans, they offer Premium Content that you can subscribe to by clicking here.

The quarterly Grain Stocks report, old crop left over as of December 1, is normally not a big market mover for soybeans. Unlike corn, where there is a big category of unknown demand, soybeans have a good understanding of things. USDA's December 1 count, 3.149 billion, was just 20 million over the trade expectation. With no change to the small feed/residual category, or the large ones of domestic crush or exports, ending stocks were raised by 10 million to 350 million on this report. That was next to the 348 trade expectation. If we were trading on US balance sheet numbers, soybean would be trading below $11.00. However, as we have South American weather risk, inflation and other factors, markets continue to hold clear premiums.

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