PF Report Reaction: USDA delivers a yawner, as expected

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Market reaction

Ahead of USDA's reports, corn futures were trading 1 to 2 cents higher, soybeans were 6 to 8 cents lower, wheat futures were mostly 10 to 14 cents lower and cotton was around 40 to 50 points lower.

After the reports, corn futures are trading 2 to 3 cents lower, soybeans are still 6 to 8 cents lower, wheat futures are 15 to 20-plus cents lower and cotton futures are 25 to 50 points lower.

 

Crop production

Cotton: 18.284 million bales; trade expected 18.19 million bales
— compares to 18.198 million bales projected in November

USDA raised its cotton crop estimate by 86,000 bales from last month. Traders expected USDA to modestly trim its cotton crop estimate. USDA kept harvested acreage unchanged at 9.922 million acres but raised the yield 5 lbs. to 885 lbs. per acre.

USDA cut the Texas yield by 9 lbs. to 732 lbs. per acre and left Georgia’s yield at 952 lbs. per acre.

 

U.S. carryover

Corn: 1.493 billion bu. for 2021-22; unchanged from 1.493 billion bu. in November

Beans: 340 million bu. for 2021-22; unchanged from 340 million bu. in November

Wheat: 598 million bu. for 2021-22; up from 583 million bu. in November

Cotton: 3.4 million bales for 2021-22; unchanged from 3.4 million bales in November

We expected a yawner from USDA this month and that’s exactly what it delivered, aside from wheat – and even that wasn’t a surprise.

USDA kept its corn ending stocks projection unchanged this month. In fact, it made no changes to the supply or demand side of the 2021-22 balance sheet. USDA kept its national average on-farm cash corn price forecast at $5.45, unchanged from last month.

USDA kept its soybean ending stocks projection unchanged this month. As with corn, it made no changes to the supply or demand side of the 2021-22 balance sheet. USDA kept its national average on-farm cash soybean price forecast at $12.10, unchanged from November.

USDA raised its wheat ending stocks projection by 15 million bu. from last month. On the supply side of the balance sheet, it cut imports by 5 million bushels. That was more than offset by a 20-million-bu. reduction to exports, which are now projected at 840 million bu., down 15.3% from 2020-21. Despite the higher ending stocks forecast, USDA raised its national average on-farm cash price projection for 2021-22 to $7.05, up 15 cents from last month.

USDA kept its cotton ending stocks forecast unchanged from last month. The modest 86,000-bale increase in crop size was offset by a 90,000-bale increase in unaccounted “use,” which moved from -50,000 bales last month to 40,000 bales. USDA kept its national average on-farm cash cotton price forecast for 2021-22 at 90 cents, unchanged from last month.

 

Global carryover

Corn: 305.54 MMT for 2021-22; up from 304.42 MMT in November
— compares with 292.69 MMT in 2020-21

Beans: 102.0 MMT for 2021-22; down from 103.78 MMT in November
— compares with 99.81 MMT in 2020-21

Wheat: 278.18 MMT for 2021-22; up from 275.87 MMT in November
— compares with 289.64 MMT in 2020-21

Cotton: 85.73 million bales for 2021-22; down from 86.93 million bales in November
— compares with 88.58 million bales in 2020-21

 

Global production highlights

Argentina beans: 49.5 MMT for 2021-22; compares with 49.5 MMT in November
— compares with 46.2 MMT in 2020-21

Brazil beans: 144.0 MMT for 2021-22; compares with 144.0 MMT in November
— compares with 138.0 MMT in 2020-21

Argentina wheat: 20.0 MMT for 2021-22; compares with 20.00 MMT in November
— compares with 17.65 MMT in 2020-21

Australia wheat: 34.0 MMT for 2021-22; compares with 31.5 MMT in November
— compares with 33.3 MMT in 2020-21

China wheat: 136.95 MMT for 2021-22; compares with 136.9 MMT in November
— compares with 134.25 MMT in 2020-21

Canada wheat: 21.65 MMT for 2021-22; compares with 21.0 MMT in November
— compares with 35.18 MMT in 2020-21

EU wheat: 138.7 MMT for 2021-22; compares with 138.4 MMT in November
— compares with 126.93 MMT in 2020-21

Russia wheat: 75.5 MMT for 2021-22; compares with 74.5 MMT in November
— compares with 85.35 MMT in 2020-21

Ukraine wheat: 33.0 MMT for 2021-22; compares with 33.0 MMT in November
— compares with 25.42 MMT in 2020-21

China corn: 272.55 MMT for 2021-22; compares with 273.0 MMT in November
— compares with 260.67 MMT in 2020-21

Argentina corn: 54.5 MMT for 2021-22; compares with 54.5 MMT in November
— compares with 50.5 MMT in 2020-21

Brazil corn: 118.0 MMT for 2021-22; compares with 118.0 MMT in November
— compares with 87.0 MMT in 2020-21

Ukraine corn: 40.0 MMT for 2021-22; compares with 38.0 MMT in November
— compares with 30.3 MMT in 2020-21

South Africa corn: 17.0 MMT for 2021-22; compares with 17.0 MMT in November
— compares with 16.9 MMT in 2020-21

China cotton: 26.75 million bales for 2021-22; compares with 26.75 million bales in November
— compares with 29.50 million bales in 2020-21

 

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