PF Report Reaction: U.S. ending stocks higher than expected
Market reaction
Ahead of USDA's reports, front-month futures were trading around a dime higher for corn, 18 cents higher for soybeans, around 2 cents higher in SRW contracts, around 7 cents higher in HRW and HRS futures and around 80 points lower in cotton.
As of 11:30 a.m. CT, front-month contracts are 6 cents higher in corn, 11 cents higher in soybeans, 2 cents lower in SRW wheat, 3 cents higher in HRW and HRS wheat and 80 points lower in cotton.
U.S. carryover
Corn: 1.540 billion bu. for 2021-22; unchanged from 1.540 billion bu. in January
Beans: 325 million bu. for 2021-22; down from 350 million bu. in January
Wheat: 648 million bu. for 2021-22; up from 628 million bu. in January
Cotton: 3.5 million bales for 2021-22; ??? from 3.2 million bales in January
USDA kept its corn ending stocks forecast unchanged at 1.540 billion bu., whereas traders expected a 28-million-bu. cut. USDA made no changes to the old-crop corn balance sheet, including the national average on-farm cash price, which remained at $5.45. That would be up 92 cents from 2020-21.
USDA lowered its soybean ending stocks projection by 25 million bu. from last month to 325 million bushels. Traders expected USDA to cut projected carryover by 40 million bushels. USDA made no changes on the supply side of the balance sheet. For demand, USDA raised projected crush by 25 million bu. from last month to a record 2.215 billion bushels. It made no other changes to soybean use. USDA raised its national average on-farm cash price projection by 40 cents from last month to $13.00, which would be up $2.20 from 2020-21.
USDA raised its old-crop wheat carryover forecast by 20 million bu. from last month to 648 million bushels. Traders expected just a 1-million-bu. increase to projected ending stocks. USDA made no changes to the supply side of the balance sheet. On the demand side, USDA cut exports by 15 million bu. (to 810 million bu.), trimmed food use by 3 million bu. (to 959 million bu.) and lowered seed use by 2 million bushels (to 64 million bu.). USDA raised its national average on-farm cash price projection for 2021-22 to $7.30, up 15 cents from last month. That would be $2.25 from 2020-21.
USDA raised its cotton ending stocks forecast by 300,000 bales from last month to 3.5 million bales. It made no changes to total supply this month. On the demand side of the balance sheet, USDA cut exports by 250,000 bales to 14.75 million bales and lowered unaccounted use by 50,000 bales to -20,000 bales. USDA kept its 2021-22 national average cash cotton price projection at 90.0 cents, which would be up 23.7 cents from last year.
Global carryover
Corn: 302.22 MMT for 2021-22; down from 303.07 MMT in January
— compares with 292.05 MMT in 2020-21
Beans: 92.83 MMT for 2021-22; down from 95.20 MMT in January
— compares with 100.42 MMT in 2020-21
Wheat: 278.21 MMT for 2021-22; down from 279.95 MMT in January
— compares with 289.87 MMT in 2020-21
Cotton: 84.31 million bales for 2021-22; down from 85.01 million bales in January
— compares with 88.66 million bales in 2020-21
Global production highlights
Argentina beans: 45.0 MMT for 2021-22; compares with 46.5 MMT in January
— compares with 46.2 MMT in 2020-21
Brazil beans: 134.0 MMT for 2021-22; compares with 139.0 MMT in January
— compares with 138.0 MMT in 2020-21
Argentina wheat: 20.5 MMT for 2021-22; compares with 20.5 MMT in January
— compares with 17.64 MMT in 2020-21
Australia wheat: 34.0 MMT for 2021-22; compares with 34.0 MMT in January
— compares with 33.3 MMT in 2020-21
China wheat: 136.95 MMT for 2021-22; compares with 136.95 MMT in January
— compares with 134.25 MMT in 2020-21
Canada wheat: 21.65 MMT for 2021-22; compares with 21.65 MMT in January
— compares with 35.18 MMT in 2020-21
EU wheat: 138.9 MMT for 2021-22; compares with 138.9 MMT in January
— compares with 126.93 MMT in 2020-21
Russia wheat: 75.5 MMT for 2021-22; compares with 75.5 MMT in January
— compares with 85.35 MMT in 2020-21
Ukraine wheat: 33.0 MMT for 2021-22; compares with 33.0 MMT in January
— compares with 25.42 MMT in 2020-21
China corn: 272.55 MMT for 2021-22; compares with 272.55 MMT in January
— compares with 260.67 MMT in 2020-21
Argentina corn: 54.0 MMT for 2021-22; compares with 54.0 MMT in January
— compares with 51.5 MMT in 2020-21
Brazil corn: 114.0 MMT for 2021-22; compares with 115.0 MMT in January
— compares with 87.0 MMT in 2020-21
Ukraine corn: 42.0 MMT for 2021-22; compares with 42.0 MMT in January
— compares with 30.3 MMT in 2020-21
South Africa corn: 17.0 MMT for 2021-22; compares with 17.0 MMT in January
— compares with 16.9 MMT in 2020-21
China cotton: 27.0 million bales for 2021-22; compares with 27.0 million bales in January
— compares with 29.50 million bales in 2020-21
