PF Report Reaction: July crop reports lack bullish surprises
Market reaction
Ahead of USDA's reports, corn futures were trading 20-plus cents lower, soybeans were 30-plus cents lower, wheat futures were 10 to 20 cents lower and cotton was around 400 points lower.
As of 11:30 a.m. CT, corn futures are trading around 35 cents lower, soybeans are 45 to 48 cents lower, wheat futures are 23 to 33 cents lower and cotton futures are around 400 points lower.
U.S. wheat production
All wheat: 1.781 billion bu.; trade expected 1.745 billion bu.
— compares with 1.737 billion bu. in June; 1.646 billion bu. in 2021
All winter wheat: 1.201 billion bu.; trade expected 1.186 billion bu.
— compares with 1.182 billion bu. in June; 1.277 billion bu. in 2021
HRW: 585 million bu.; trade expected 583 million bu.
— compares with 582 million bu. in June; 749 million bu. in 2021
SRW: 376 million bu.; trade expected 362 million bu.
— compares with 358 million bu. in June; 361 million bu. in 2021
White winter: 240 million bu.; trade expected 241 million bu.
— compares with 242 million bu. in June; 167 million bu. in 2021
Other spring wheat: 503 million bu.; trade expected 458 million bu.
— compares with 331 million bu. in 2021
Durum wheat: 77 million bu.; trade expected 63 million bu.
— compares with 37 million bu. in 2021
USDA raised its winter wheat crop estimate by 19 bu. from last month, whereas traders expected an 8-million-bu. increase. Its first survey-based estimates of the other spring wheat and durum crops came in 45 million bu. and 14 million bu., respectively, above expectations. The first all-wheat production estimate was 36 million bu. higher than expected. USDA estimates the all-wheat yield at 47.3 bu. per acre, up 0.4 bu. from last month’s projection. Harvested acres at 37.6 million acres increased 500,000 acres from last month’s projection.
USDA estimates hard red winter wheat production at 585 million bu., up 3 million bu. from last month and 2 million bu. higher than expected. The SRW crop is estimated at 376 million bu., up 18 million bu. from June and 14 million bu. higher than anticipated. The white winter wheat crop at 240 million bu. was trimmed 2 million bu. from last month and came in 1 million bu. smaller than expected. USDA cut its winter wheat yield by 0.2 bu. to 48.0 bu. per acre and raised harvested area by 503,000 acres to 25.002 million acres.
The initial other spring wheat yield is estimated at 47.0 bu. per acre and harvested area is forecast at 10.705 million acres. The durum yield is estimated at 40.3 bu. per acre and harvested area is pegged at 1.915 million acres.
U.S. carryover
Corn: 1.510 billion bu. for 2021-22; up from 1.485 billion bu. in June
— 1.470 billion bu. for 2022-23; up from 1.400 billion bu. in June
Beans: 215 million bu. for 2021-22; up from 205 million bu. in June
— 230 million bu. for 2022-23; down from 280 million bu. in June
Wheat: 660 million bu. for 2021-22; up from 655 million bu. in June
— 639 million bu. for 2022-23; up from 627 million bu. in June
Cotton: 3.4 million bales for 2021-22; unchanged from 3.4 million bales in June
— 2.4 million bales for 2022-23; down from 2.9 million bales in June
USDA increased old-crop corn carryover from last month by 25 million bu. – that’s 22 million bu. above the average pre-report trade estimate. USDA cut estimated corn feed & residual use 25 million bu. from last month to 5.6 billion bushels. The national average on-farm cash corn price for 2021-22 is unchanged from last month at $5.95.
New-crop corn carryover is up 70 million bu. from last month and is 28 million bu. above the average pre-report trade estimate. On the supply-side of the 2022-23 balance sheet, USDA increased harvested acres based on the June Acreage Report and left the national average yield projection unchanged from last month at 177 bu. per acre. The result is a crop projection of 14.505 billion bu., up 45 million bu. from last month. On the demand side of the new-crop balance sheet, USDA made no changes to usage projections, transferring all of the increase in beginning stocks (old-crop carryover) and in the crop projection to the bottom line. USDA puts the national average on-farm cash corn price for 2022-23 at $6.65, down a dime from last month.
UDSA raised old-crop soybean carryover by 10 million bu. from last month, which was 7 million bu. above the average pre-report trade estimate. USDA cut estimated 2021-22 soybean crush 10 million bu. to 2.205 billion bu., cut estimated seed use 3 million bu. and increased estimated old-crop residual 3 million bu. to account for the increase in carryover. USDA puts the national average on-farm cash bean price for 2021-22 at $13.35, unchanged from last month.
New-crop bean carryover is down 50 million bu. from last month but is 19 million bu. above the average pre-report trade estimate. USDA cut estimated harvested bean acres 2.6 million from last month based on the June Acreage Report. The national average bean yield (which is based on a weather-adjusted trend model) is unchanged from last month at 51.5 bu. per acre. The net result is a 135-million-bu. cut to the projected 2022 bean crop. That cut to supplies was partially offset by the increase in beginning stocks (old-crop carryover). On the soybean demand side for 2022-23, USDA cut 10 million bu. from expected crush (now at 2.245 billion bu.) and cut 65 million bu. from expected new-crop bean exports (now at 2.135 billion bu.). USDA puts the national average on-farm cash soybean price for 2022-23 at $14.40, down 30 cents from last month.
The 2021-22 wheat carryover estimate was set by the June 1 Quarterly Grain Stocks Report and is up 5 million bu. from last month. To account for the change, USDA cut 4 million bu. from estimated seed use (now at 60 million bu.) and cut 1 million bu. from old-crop wheat exports (now at 804 million bu.). USDA puts the national average on-farm cash wheat price for 2021-22 at $7.63, down 7 cents from last month.
New-crop wheat carryover is up 12 million bu. from last month and is 1 million bu. above the average pre-report trade estimate. Total supplies for 2021 were raised 39 million bu. by way of the bigger beginning stocks (old-crop carryover), the bigger crop estimate and a 10-million-bu. cut to estimated 2022-23 wheat imports (to 110 million bu.). On the demand side of the balance sheet, USDA increased estimated seed use 2 million bu. (to 68 million bu.) and raised estimated exports 25 million bu. (to 800 million bu.). USDA puts the national average on-farm cash wheat price for 2022-23 at $10.50, down 25 cents from last month.
Old-crop cotton carryover is unchanged from last month and USDA made no changes to the supply- or demand-side of the balance sheet. USDA puts the national average on-farm cash cotton price for 2021-22 at 92 cents, unchanged from last month.
New-crop cotton carryover is down 500,000 bales from last month and is 470,000 bales below the average pre-report trade estimate. USDA adjusted planted cotton acres up 250,000 from last month based on the June Acreage Report. Harvested cotton acres, however, were lowered 590,000 acres from last month “based on 10-year average abandonment by region, with the Southwest adjusted to reflect unfavorable moisture conditions,” says USDA. The national average cotton yield was raised 3 lbs. per acre “based on 5-year average yields by region,” according to a footnote from USDA. The result was a 1-million-bale cut to the estimated 2022 cotton crop. On the demand-side, USDA cut 500,000 bales from estimated exports (to 14 million bales). USDA puts the national average on-farm cash cotton price for 2022-23 at 95 cents, unchanged from last month.
Global carryover
Corn: 312.28 MMT for 2021-22; up from 310.92 MMT in June
— 312.94 MMT for 2022-23; up from 310.45 MMT in June
Beans: 88.73 MMT for 2021-22; up from 86.15 MMT in June
— 99.61 MMT for 2022-23; up from 100.46 MMT in June
Wheat: 280.10 MMT for 2021-22; down from 279.40 MMT in June
— 267.52 MMT for 2022-23; up from 266.85 MMT in June
Cotton: 84.04 million bales for 2021-22; up from 82.95 million bales in June
— 84.26 million bales for 2022-23; up from 82.77 million bales in June
Global production highlights
Argentina beans: 44.0 MMT for 2021-22; compares with 43.4 MMT in June
— projection of 51.0 MMT for 2022-23; compares with 51.0 MMT in June
Brazil beans: 126.0 MMT for 2021-22; compares with 126.0 MMT in June
— projection of 149.0 MMT for 2022-23; compares with 149.0 MMT in June
Argentina wheat: 22.15 MMT for 2021-22; compares with 22.15 MMT in June
— projection of 19.5 MMT for 2022-23; compares with 20.0 MMT in June
Australia wheat: 36.3 MMT for 2021-22; compares with 36.3 MMT in June
— projection of 30.0 MMT for 2022-23; compares with 30.0 MMT in June
China wheat: 136.95 MMT for 2021-22; compares with 136.95 MMT in June
— projection of 135.0 MMT for 2022-23; compares with 135.0 MMT in June
Canada wheat: 21.65 MMT for 2021-22; compares with 21.65 MMT in June
— projection of 34.0 MMT for 2022-23; compares with 33.0 MMT in June
EU wheat: 138.42 MMT for 2021-22; compares with 138.42 MMT in June
— projection of 134.1 MMT for 2022-23; compares with 136.1 MMT in June
Russia wheat: 75.16 MMT for 2021-22; compares with 75.16 MMT in June
— projection of 81.5 MMT for 2022-23; compares with 81.0 MMT in June
Ukraine wheat: 33.01 MMT for 2021-22; compares with 33.01 MMT in June
— projection of 19.5 MMT for 2022-23; compares with 21.5 MMT in June
China corn: 272.55 MMT for 2021-22; compares with 272.55 MMT in June
— projection of 271.0 MMT for 2022-23; compares with 271.0 MMT in June
Argentina corn: 53.0 MMT for 2021-22; compares with 53.0 MMT in June
— projection of 55.0 MMT for 2022-23; compares with 55.0 MMT in June
Brazil corn: 116.0 MMT for 2021-22; compares with 116.0 MMT in June
— projection of 126.0 MMT for 2022-23; compares with 126.0 MMT in June
Ukraine corn: 42.13 MMT for 2021-22; compares with 42.13 MMT in June
— projection of 25.0 MMT for 2022-23; compares with 25.0 MMT in June
South Africa corn: 16.3 MMT for 2021-22; compares with 16.3 MMT in June
— projection of 17.3 MMT for 2022-23; compares with 17.3 MMT in June
China cotton: 27.0 million bales for 2021-22; compares with 27.0 million bales in June
— projection of 27.5 million bales for 2022-23; compares with 27.5 MMT in June
