PF Report Reaction: Minor changes balance sheets, winter wheat production
Market reaction
Ahead of USDA's reports, corn futures were trading 1 to 3 cents lower, soybeans were 20-plus cents lower, winter wheat futures were 6 to 8 cents lower, spring wheat was narrowly mixed and cotton futures were around 50 points lower.
As of 11:30 a.m. CT, corn futures are trading 3 to 4 cents higher, soybeans are 9 to 12 cents lower, wheat futures are 5 to 11 cents higher and cotton is around 70 points lower.
Winter wheat production
All wheat: 1.737 billion bu.; trade expected 1.713 billion bu.
— compares with 1.729 billion bu. in May; 1.646 billion bu. in 2021
All winter wheat: 1.182 billion bu.; trade expected 1.174 billion bu.
— compares with 1.174 billion bu. in May; 1.277 billion bu. in 2021
HRW: 582 million bu.; trade expected 585 million bu.
— compares with 590 million bu. in May; 749 million bu. in 2021
SRW: 358 million bu.; trade expected 357 million bu.
— compares with 354 million bu. in May; 361 million bu. in 2021
White winter: 242 million bu.; trade expected 232 million bu.
— compares with 230 million bu. in May; 167 million bu. in 2021
USDA raised its winter wheat production estimate by 8 million bu. from last month amid a 0.3 bu. increase to the yield, which is now estimated at 48.2 bu. per acre. Harvested acres were unchanged from last month at 24.499 million acres.
USDA’s HRW crop estimate declined 8 million bu. from last month, while production was increased 4 million bu. for SRW and 12 million bu. for the white winter wheat crop.
USDA’s all wheat crop projection of 1.737 billion bu. implies a combined other spring and durum wheat crop of 555 million bu., unchanged from last month. USDA will issue its first spring wheat production estimates in July.
U.S. carryover
Corn: 1.485 billion bu. for 2021-22; up from 1.440 billion bu. in May
— 1.400 billion bu. for 2022-23; up from 1.360 billion bu. in May
Beans: 205 million bu. for 2021-22; down from 235 million bu. in May
— 280 million bu. for 2022-23; down from 310 million bu. in May
Wheat: 655 million bu. for 2021-22; unchanged from 655 million bu. in May
— 627 million bu. for 2022-23; up from 619 million bu. in May
Cotton: 3.4 million bales for 2021-22; unchanged from 3.4 million bales in May
— 2.9 million bales for 2022-23; unchanged from 2.9 million bales in May
USDA raised old-crop corn carryover by 45 million bu. from last month. USDA made no changes to the supply side of the old-crop balance sheet. On the demand side, it cut exports by 50 million bu. (to 2.450 billion bu.) and increased food, seed and industrial use by 5 million bushels (to 6.815 billion bu.). USDA raised the 2021-22 average on-farm cash price by a nickel from last month to $5.95.
On the new-crop corn balance sheet, USDA raised projected ending stocks by 40 million bu. from last month. Beginning stocks increased 45 million bu. (higher old-crop carryover). That was only partially offset by a 5-million-bu. increase in projected food, seed and industrial use (to 6.820 billion bu.).
USDA cut 2021-22 soybean ending stocks by 30 million bu. from last month amid an increase to exports, which are now projected at 2.170 billion bushels. USDA raised its old-crop price forecast by a dime from last month to $13.35.
USDA lowered projected new-crop soybean ending stocks by 30 million bu. from last month, with the only change being lower beginning stocks (old-crop carryover). USDA raised its 2022-23 on-farm average cash price projection by 30 cents from last month to $14.70.
USDA made no changes to its old-crop wheat balance sheet this month. It projects the 2021-22 average on-farm cash price at $7.70, unchanged from last month.
For 2022-23, total wheat supplies increased 8 million bu. as the result of the slightly bigger crop estimate. USDA made no changes to the demand side of the new-crop balance sheet. As a result, projected 2022-23 ending stocks increased 8 million bu. from last month, though they would be down 28 million bu. from 2021-22. USDA kept its 2022-23 on-farm average cash price projection at $10.75.
USDA made no changes to its old-crop cotton balance sheet this month. It kept the 2021-22 price forecast at 92.0 cents.
USDA also made no changes to the 2022-23 cotton balance sheet. However, it raised the 2022-23 price projection by a nickel from last month to 95 cents.
Global carryover
Corn: 310.92 MMT for 2021-22; up from 309.39 MMT in May
— 310.45 MMT for 2022-23; up from 305.13 MMT in May
Beans: 86.15 MMT for 2021-22; up from 85.24 MMT in May
— 100.46 MMT for 2022-23; up from 99.60 MMT in May
Wheat: 279.40 MMT for 2021-22; down from 279.72 MMT in May
— 266.85 MMT for 2022-23; down from 267.02 MMT in May
Cotton: 82.95 million bales for 2021-22; down from 83.65 million bales in May
— 82.77 million bales for 2022-23; down from 82.82 million bales in May
Global production highlights
Argentina beans: 43.4 MMT for 2021-22; compares with 42.0 MMT in May
— projection of 51.0 MMT for 2022-23; compares with 51.0 MMT in May
Brazil beans: 126.0 MMT for 2021-22; compares with 125.0 MMT in May
— projection of 149.0 MMT for 2022-23; compares with 149.0 MMT in May
Argentina wheat: 22.15 MMT for 2021-22; compares with 22.15 MMT in May
— projection of 20.0 MMT for 2022-23; compares with 20.0 MMT in May
Australia wheat: 36.3 MMT for 2021-22; compares with 36.3 MMT in May
— projection of 30.0 MMT for 2022-23; compares with 30.0 MMT in May
China wheat: 136.95 MMT for 2021-22; compares with 136.95 MMT in May
— projection of 135.0 MMT for 2022-23; compares with 135.0 MMT in May
Canada wheat: 21.65 MMT for 2021-22; compares with 21.65 MMT in May
— projection of 33.0 MMT for 2022-23; compares with 33.0 MMT in May
EU wheat: 138.42 MMT for 2021-22; compares with 138.42 MMT in May
— projection of 136.1 MMT for 2022-23; compares with 136.5 MMT in May
Russia wheat: 75.16 MMT for 2021-22; compares with 75.16 MMT in May
— projection of 81.0 MMT for 2022-23; compares with 80.0 MMT in May
Ukraine wheat: 33.01 MMT for 2021-22; compares with 33.01 MMT in May
— projection of 21.5 MMT for 2022-23; compares with 21.5 MMT in May
China corn: 272.55 MMT for 2021-22; compares with 272.55 MMT in May
— projection of 271.0 MMT for 2022-23; compares with 271.0 MMT in May
Argentina corn: 53.0 MMT for 2021-22; compares with 53.0 MMT in May
— projection of 55.0 MMT for 2022-23; compares with 55.0 MMT in May
Brazil corn: 116.0 MMT for 2021-22; compares with 116.0 MMT in May
— projection of 126.0 MMT for 2022-23; compares with 126.0 MMT in May
Ukraine corn: 42.13 MMT for 2021-22; compares with 42.13 MMT in May
— projection of 25.0 MMT for 2022-23; compares with 19.5 MMT in May
South Africa corn: 16.3 MMT for 2021-22; compares with 16.3 MMT in May
— projection of 17.3 MMT for 2022-23; compares with 17.3 MMT in May
China cotton: 27.0 million bales for 2021-22; compares with 27.0 million bales in May
— projection of 27.5 million bales for 2022-23; compares with 27.5 MMT in May
