PF Report Reaction: Record soybean crop estimate pushed new-crop ending stocks higher than expected

Market reaction

Ahead of USDA's reports, corn futures were trading 1 to 2 cents higher, Soybeans were 10 to 14 cents higher, wheat futures were 16 to 20 cents lower and cotton was 50 to 100 points lower.

As of 11:30 a.m. CT, corn futures are trading steady to a penny higher, soybeans are 18 to 20 cents lower, wheat futures are 5 to 10 cents lower and cotton is up the 400 point daily limit.  

U.S. crop production

Corn: 14.359 billion bu.; trade expected 14.392 billion bu.
— compares to 14.505 billion bu. projected in July; 15.115 billion bu. in 2021

Beans: 4.531 billion bu.; trade expected 4.481 billion bu.
— compares to 4.505 billion bu. projected in July; 4.435 billion bu. in 2021

Cotton: 12.570 million bales; trade expected 14.75 million bales
— compares to 15.50 million bales projected in July; 17.52 million bales in 2021

All wheat: 1.783 billion bu.; trade expected 1.791 billion bu.
— compares with 1.781 billion bu. in July; 1.646 billion bu. in 2021

All winter wheat: 1.198 billion bu.; trade expected 1.203 billion bu.
— compares with 1.201 billion bu. in July; 1.277 billion bu. in 2021

HRW: 576 million bu.; trade expected 585 million bu.
— compares with 585 million bu. in July; 749 million bu. in 2021

SRW: 381 million bu.; trade expected 376 million bu.
— compares with 376 million bu. in July; 361 million bu. in 2021

White winter: 240 million bu.; trade expected 242 million bu.
— compares with 240 million bu. in July; 167 million bu. in 2021

Other spring wheat: 512 million bu.; trade expected 510 million bu.
— compares 503 million bu. in July; 331 million bu. in 2021

Durum wheat: 74 million bu.; trade expected 77 million bu.
— compares with 77 million bu. in July; 37 million bu. in 2021

USDA’s initial corn crop estimate 33 million bu. lower than the average pre-report trade estimate and down 146 million bu. from the July projection. USDA estimates the national average yield at 175.4 bu. per acre, down 1.6 bu. per acre from last year’s record and 5.6 bu. (3.1%) below trendline. USDA estimates harvested acres at 81.840 million acres, 100,000 acres less than previously forecast.

In the top 12 production states, USDA estimates yields at 203 bu. per acre in Illinois, 189 bu. in Indiana, a record 205 bu. in Iowa, 123 bu. in Kansas, 170 bu. in Michigan, 193 bu. in Minnesota, 153 bu. in Missouri, 181 bu. in Nebraska, 145 bu. in North Dakota, 190 bu. in Ohio, 147 bu. in South Dakota and a record 185 bu. in Wisconsin.

USDA’s first soybean crop estimate would be a record and came in 50 million bu. higher than traders expected and up 26 million bu. from the July projection. The national average yield of 51.9 bu. per acre would match the 2016 record. USDA lowered its harvested acreage estimate by 300,000 from June to 87.211 million acres.

USDA estimates record soybean yields in seven states – Arkansas, Illinois, Indiana, Maryland, Mississippi, Ohio and Virginia. In the top 13 production states, USDA estimates yields at 53 bu. per acre in Arkansas, 66 bu. in Illinois, 60 bu. in Indiana, 58 bu. in Iowa, 40 bu. in Kansas, 47 bu. in Michigan, 50 bu. in Minnesota, 49 bu. in Missouri, 55 bu. in Nebraska, 35 bu. in North Dakota, 57 bu. in Ohio, 43 bu. in South Dakota and 52 bu. in Wisconsin.

USDA’s all-wheat crop estimate increased 2 million bu. from last month but was 8 million bu. lower than the average pre-report estimate. USDA decreased planted and harvested acres by 100,000 acres each. USDA increased its all-wheat yield by 0.2 bu. to 47.5 bu. per acre. As expected, USDA made modest changes to its production estimates by class, with HRW down 9 million bu., SRW up 5 million bu., white winter unchanged, other spring wheat up 9 million bu. and durum down 3 million bu. from last month.  

USDA’s initial cotton crop estimate came in 2.18 million bales lower than traders expected and down 2.93 million bales from the July projection. The yield estimate at 846 lbs. per acre was cut 24 lbs. from USDA’s July projection and harvested acres were slashed 1.42 million acres from June.

USDA estimates the cotton yield at 634 lbs. per acre in Texas, down 32 lbs. from last year. The Texas upland harvested acreage estimate at 2.2 million acres would be record-low, if realized.

U.S. carryover

Corn: 1.530 billion bu. for 2021-22; up from 1.510 billion bu. in July
— 1.388 billion bu. for 2022-23; down from 1.470 billion bu. in July

Beans: 225 million bu. for 2021-22; up from 215 million bu. in July
— 245 million bu. for 2022-23; up from 230 million bu. in July

Wheat: 610 million bu. for 2022-23; down from 639 million bu. in July

Cotton: 3.5 million bales for 2021-22; up from 3.4 million bales in July
— 1.8 million bales for 2022-23; down from 2.4 million bales in July

USDA raised old-crop corn ending stocks 20 million bu. from last month, the result of a 20-million-bu. cut to estimated Food, Seed & Industrial use. (USDA actually cut 25 million bu. from estimated corn-for-ethanol use, which is included in FSI. That means “other” FSI use was increased 5 million bu. from last month.) This puts old-crop corn carry 18 million bu. above the average pre-report trade estimate. USDA puts the 2021-22 national average cash corn price at $5.95, unchanged from last month.

USDA cut estimated new-crop carryover 82 million bu. from last month. At 1.388 billion, 2022-23 corn carryover is 14 million bu. below the average pre-report trade estimate. New-crop corn supplies are estimated at 15.913 billion bu., down 127 million bu. from last month due to the smaller crop estimate that was partially offset by the 20-million-bu. increase to beginning stocks. On the demand side, USDA cut estimated Feed & Residual use 25 million bu. (to 5.325 billion bu.) and sliced 25 million bu. from estimated new-crop exports (to 2.375 billion bu.). Estimated 2022-23 FSI use was increased 5 million bu. (to 6.825 billion – corn-for-ethanol use was unchanged from last month at 5.375 billion bu.). Total use for new-crop corn is estimated down 45 million bu. from July. USDA puts the national average on-farm cash corn price for 2022-23 at $6.65, unchanged from last month.

Old-crop soybean carryover is up 10 million bu. from last month. At 225 million bu., carryover is just 1 million bu. below the average pre-report trade estimate. USDA made no change to the supply-side of the old-crop balance sheet. On the demand side, estimated exports were cut 10 million bu. (to 2.16 billion bu.) and expected seed use was trimmed 1 million bushels. After rounding, total use is estimated down 10 million bushels. USDA puts the national average on-farm cash bean price for 2021-22 at $13.30, down a nickel from last month.

New-crop bean carryover at 245 million bu. is up 15 million bu. from last month and is 15 million bu. above the average pre-report trade estimate. Total new-crop bean supplies are up 36 million bu. from last month due to the increase in beginning stocks and an increase in the crop estimate. On the demand side, USDA raised total use 21 million bushels. Estimated exports are up 20 million bu. (to 2.155 billion bu.) and residual use was increased 1 million bu. (to 24 million bu.). Estimated new-crop bean crush was unchanged from last month at 2.245 billion bushels. USDA puts the national average on-farm cash bean price for 2022-23 at $14.35, down a nickel from last month.

USDA 2022-23 wheat crop estimate of 610 million bu. is down 29 million bu. from last month and is 40 million bu. below the average pre-report trade estimate. Total 2022-23 wheat supplies are up just 2 million bu. from last month due to the slightly higher crop estimate. On the demand side, USDA increased estimated food use 6 million bu. (to 970 million bu.) and increased estimated exports 25 million bu. (to 825 million bu.). USDA puts the national average on-farm cash wheat price for 2022-23 at $9.25, down $1.25 from last month.

Old-crop cotton carryover is up 100,000 bales from last month. USDA made no changes to the supply-side of the old-crop balance sheet. On the demand side, USDA cut 100,000 bales from exports (to 14.65 million bales). USDA puts the national average on-farm cash cotton price for 2021-22 at 92 cents, unchanged from last month.

New-crop cotton carryover at 1.8 million bales is down 600,000 bales from last month and is 370,000 bales below the average pre-report trade estimate. USDA cut total supplies 2.83 million bales the result of a sharp cut to the 2022 crop estimate that was slightly offset by the increase to beginning stocks. On the demand side of the 2022-23 cotton balance sheet, USDA cut 200,000 bales from estimated domestic use (to 2.3 million bales), cut 2 million bales from estimated exports (to 12.0 million bales) and trimmed 40,000 bales from unaccounted use (to -30,000 bales). USDA puts the national average on-farm cash cotton price for 2022-23 at 97 cents, up 2 cents from July.

Global carryover

Corn: 311.84 MMT for 2021-22; down from 312.28 MMT in July
— 306.68 MMT for 2022-23; down from 312.94 MMT in July

Beans: 89.73 MMT for 2021-22; up from 88.73 MMT in July
— 101.41 MMT for 2022-23; up from 99.61 MMT in July

Wheat: 276.35 MMT for 2021-22; down from 280.10 MMT in July
— 267.34 MMT for 2022-23; down from 267.52 MMT in July

Cotton: 84.72 million bales for 2021-22; up from 84.04 million bales in July
— 82.77 million bales for 2022-23; down from 84.26 million bales in July

Global production highlights

Argentina beans: 44.0 MMT for 2021-22; compares with 44.0 MMT in July
— projection of 51.0 MMT for 2022-23; compares with 51.0 MMT in July

Brazil beans: 126.0 MMT for 2021-22; compares with 126.0 MMT in July
— projection of 149.0 MMT for 2022-23; compares with 149.0 MMT in July

Argentina wheat: 22.50 MMT for 2021-22; compares with 22.15 MMT in July
— projection of 19.0 MMT for 2022-23; compares with 19.5 MMT in July

Australia wheat: 36.3 MMT for 2021-22; compares with 36.3 MMT in July
— projection of 33.0 MMT for 2022-23; compares with 30.0 MMT in July

China wheat: 136.95 MMT for 2021-22; compares with 136.95 MMT in July
— projection of 138.0 MMT for 2022-23; compares with 135.0 MMT in July

Canada wheat: 21.65 MMT for 2021-22; compares with 21.65 MMT in July
— projection of 35.0 MMT for 2022-23; compares with 34.0 MMT in July

EU wheat: 138.29 MMT for 2021-22; compares with 138.42 MMT in July
— projection of 132.1 MMT for 2022-23; compares with 134.1 MMT in July

Russia wheat: 75.16 MMT for 2021-22; compares with 75.16 MMT in July
— projection of 88.0 MMT for 2022-23; compares with 81.5 MMT in July

Ukraine wheat: 33.01 MMT for 2021-22; compares with 33.01 MMT in July
— projection of 19.5 MMT for 2022-23; compares with 19.5 MMT in July

China corn: 272.55 MMT for 2021-22; compares with 272.55 MMT in July
— projection of 271.0 MMT for 2022-23; compares with 271.0 MMT in July

Argentina corn: 53.0 MMT for 2021-22; compares with 53.0 MMT in July
— projection of 55.0 MMT for 2022-23; compares with 55.0 MMT in July

Brazil corn: 116.0 MMT for 2021-22; compares with 116.0 MMT in July
— projection of 126.0 MMT for 2022-23; compares with 126.0 MMT in July

Ukraine corn: 42.13 MMT for 2021-22; compares with 42.13 MMT in July
— projection of 30.0 MMT for 2022-23; compares with 25.0 MMT in July

South Africa corn: 16.3 MMT for 2021-22; compares with 16.3 MMT in July
— projection of 17.3 MMT for 2022-23; compares with 17.3 MMT in July

China cotton: 27.0 million bales for 2021-22; compares with 27.0 million bales in July
— projection of 27.5 million bales for 2022-23; compares with 27.5 MMT in July