Friday’s World Agricultural Supply and Demand Estimates made few changes to South American crop production compared to last month and raised global corn ending stocks slightly.
2021/2022 WORLD CROP PRODUCTION
On Friday, the USDA pegged the 2021 Brazilian soybean production at 125.0 mmt vs. the USDA’s estimate last month of 127.0 mmt. and the trade’s expectation of 125.0 mmt.
For corn, Brazil’s output is seen at 116.0 mmt. vs. the trade’s expectation of 115.2 mmt. and the USDA’s March estimate of 114.0 mmt.
For Argentina’s soybean output, the USDA pegged its crop at 43.5 mmt. vs. the USDA’s March estimate of 43.5 mmt. and the trade’s expectation of 42.6 mmt.
Argentina’s 2020/2021 corn crop is pegged at 53.0 mmt vs. the USDA’s previous estimate of 53.0 mmt. and the trade’s expectation of 51.9 mmt.
2021/2022 U.S. Ending Stocks
For corn, the USDA pegged the U.S. 2021-22 projected ending stocks at 1.44 billion bushels vs. the trade estimate of 1.400 billion bushels and the March estimate of 1.44 billion bushels.
For soybeans, the U.S. ending stocks were 260 million bushels vs. the trade that expected the USDA to print 254 million bushels today. In March, the USDA’s estimate was 285 million.
In its report, the USDA pegged the U.S. wheat ending stocks at 678 million bushels vs. the trade’s expectation of 654 million and compared with the March estimate of 653 million bushels.
2021/2022 World Ending Stocks
On Friday, the USDA pegged the world’s corn ending stocks at 305.5 mmt. vs. the trade’s expectation of 300.7 mmt. and the USDA’s March estimate of 301 mmt.
For soybeans, the world ending stocks are estimated at 89.6 mmt. vs. the trade’s expectation of 88.4 mmt. and the USDA’s March estimate of 90 mmt.
For wheat, the USDA pegged world ending stocks at 278.4 mmt. vs. the trade’s expectation of 281.5 mmt. and the USDA’s previous estimate of 281.5 mmt.
Trade Reaction
The report wasn’t a big market mover.
“Today’s report matched trade expectations that the USDA would underestimate supply losses from the South American drought and the Russian invasion of Ukraine,” says Sal Gilbertie of Teucrium Funds. “The markets remain firm and will watch weather and look ahead to the May WASDE for future price direction.”
Corn futures did fall briefly after the report due to increased global corn stocks, says Don Roose of U.S. Commodities in West Des Moines, Iowa.
“But then we added the risk premium right back because there’s too much uncertainty,” Roose says. “The March 31 acres [USDA Prospective Plantings] report said we need to buy more corn acres, and that’s what the market is trying to do.”
