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Today USDA released the latest World Agricultural Supply and Demand Estimates (WASDE) report. Bewildering analysts, USDA made no changes to U.S. corn and soybean supply numbers.
2022/2023 U.S. ENDING STOCKS
The WASDE report pegged the U.S. 2022/2023 corn ending stocks at 1.342 billion bushels, reflecting no change from March. This is above the trade’s estimate of 1.319 billion bushels.
For soybeans, the U.S. ending stocks were pegged at 210 million bushels, in line with the March estimate and above the trade’s expectation of 198 million bushels.
USDA pegged the U.S. wheat ending stocks at 598 million bushels, an increase from March’s estimate of 568 million bushels and above the trade’s expectation of 574 million bushels.
2022/2023 WORLD ENDING STOCKS
USDA pegged the world’s corn ending stocks at 295.4 million metric tons (mmt) vs. the trade’s expectation of 295 mmt. Last month, USDA’s estimate was 296.5 mmt.
For soybeans, the world ending stocks are estimated at 100.3 mmt vs. the trade’s expectation of 98.6 mmt. USDA’s March estimate was 100 mmt.
For wheat, USDA pegged world ending stocks at 265.1 mmt. This is below the trade’s expectation of 267.1 mmt and the March estimate of 267.2 mmt.
2022/2023 ARGENTINA AND BRAZIL CROP PRODUCTION
For corn, Argentina’s production is pegged at 37 mmt, just below the trade’s expectation of 37.1 mmt and last month’s estimate of 40 mmt.
Brazil’s corn production is estimated at 125 mmt vs. the trade’s expectation of 126.1 mmt and last month’s estimate of 125 mmt.
For 2021/2022, Brazil and Argentina combined are estimated to have produced 165.5 mmt of corn. As of now they are estimated to produce 3.5 mmt less in 2022/2023.
For soybeans, Argentina is estimated to produce 27 mmt vs. the trade’s expectation of 29.3 mmt and March’s estimate of 33 mmt.
Brazil’s soybean production is pegged at 154 mmt vs. the trade’s expectation of 153.7 mmt and last month’s estimate of 153 mmt.
For 2021/2022, Brazil and Argentina combined are estimated to have produced 174.4 mmt of soybeans. As of now, they are estimated to surpass that in 2022/2023 by 6.6 mmt.
More from USDA
“U.S. soybean supply and use forecasts for 2022/2023 are unchanged relative to last month,” USDA says in the report. “This month’s 2022/2023 U.S. corn outlook is for reductions to imports and food, seed, and industrial (FSI) use…With supply and use falling by the same amount, ending stocks are unchanged at 1.342 billion bushels.”
For wheat, USDA says, “The outlook for 2022/2023 U.S. wheat this month is for slightly higher supplies, reduced domestic use, unchanged exports, and increased ending stocks. Supplies are raised five million bushels on higher imports…Domestic use is lowered 25 million bushels on reduced feed and residual use, which is decreased to 55 million…Wheat exports remain at 775 million bushels but there are offsetting by-class changes for White and Hard Red Spring exports. Projected 2022/2023 ending stocks are raised 30 million bushels to 598 million but are still 14% below last year.”
TRADE REACTION
“Today’s USDA report was perplexing to many,” says Naomi Blohm, senior market advisor with Total Farm Marketing. “The USDA made no changes to U.S. corn or soybean carryout numbers, opting to kick the can down the road and let Mother Nature make her move instead.”
Al Kluis, managing director of Kluis Commodity Advisors, says, “The surprise in the report is that the USDA did not make any changes to the soybean ending stocks, when the most recent USDA Grain Stocks report showed 57 million bushels lower than expected. The South American numbers came in close to trade estimates. I anticipate the Argentine crop moving lower in future reports. Now it’s back to trading U.S. weather and weather forecasts.”
“Argentina’s massive cuts to production estimates aren’t enough to rally the beans past today’s highs,” says Nick Tsiolis, founder of Farmer’s Keeper. “This is most likely due to an increase to Brazil’s production and poor demand for U.S. beans. This report is not typically a big market mover, and we’re seeing that ring true today. There weren’t many surprises, and these numbers appeared to have been priced into the market already.”
