With the primary take a look at 2021/22 provide and demand estimates, the Could 2021 World Agricultural Provide and Demand Estimates (WASDE) report is stuffed with worthwhile insights to unpack. New crop corn futures edged decrease on lowered demand estimates within the new crop 12 months, largely from a smaller export quantity.
Outdated crop soybean futures rose on smaller Argentine manufacturing this 12 months and bullish soybean import projections from China. Prospects for a big U.S. wheat harvest this summer time despatched wheat futures decrease following the report’s launch.
USDA’s outlook for corn this month assumes farmers will return to trendline yields of 179.5 bushels per acre for a complete manufacturing of 15.0 billion bushels. The company additionally expects improved home use, decrease exports and better ending shares.
USDA predicts U.S. corn exports will decline 325 million bushels in the course of the 2021/22 advertising 12 months. A hiccup in South American manufacturing ought to assist U.S. prospects in the course of the first half of the upcoming advertising 12 months, however USDA additionally expects a 335-million-bushel enhance in Russian and Ukrainian exports in 2021/22, which ought to restrict home upside potential.
With that in consideration, ending shares for 2021/22 ought to rise 250 million bushels year-over-year to 1.507 billion bushels, in line with USDA. Analysts have been anticipating that quantity to be a lot decrease, with a mean commerce guess of 1.344 billion bushels.
“The season-average corn price received by producers in 2021/22 is projected at $5.70 per bushel, up $1.35 from a year ago when much of the crop was marketed at lower prices,” the report additionally notes.
South American manufacturing noticed some revisions from April. In Brazil, manufacturing potential fell 275 million bushels to 4.016 billion bushels. In Argentina, USDA held estimates regular from a month in the past, with 1.850 billion bushels.
World ending shares for 2021/22 have been additionally larger than commerce guesses, coming in at 11.508 million bushels. Analysts had supplied up a mean estimate of 11.144 previous to right now’s report.
USDA’s 2021/22 soybean outlook requires decrease provides and exports, an bettering crush quantity and better ending shares in comparison with the present advertising 12 months. USDA estimates this 12 months’s soybean manufacturing will attain 4.4 million bushels, based mostly on extra acres and trendline yields. Favorable crush margins ought to push the 2021/22 crush 35 million bushels larger year-over-year to achieve 2.2 billion bushels.
Soybean exports this upcoming advertising 12 months are anticipated to slip 205 million bushels under 2020/21 quantity, to 2.1 billion bushels. That leaves ending shares at 140 million bushels, which was barely above the typical commerce guess of 138 million bushels. The U.S. share of whole world exports can be anticipated to drop from 36% this 12 months right down to 33%. Costs might common $13.85 per bushel, which is an enchancment of $2.60 in comparison with 2020/21.
South American manufacturing noticed estimates maintain regular for Brazil, with 4.997 billion bushels, whereas Argentina’s manufacturing slid 18 million bushels decrease from a month in the past, to 1.727 billion bushels.
Globally, USDA estimates 2021/22 soybean shares at 3.347 billion bushels. That’s a bit above the typical commerce guess of three.238 billion bushels.
For wheat, USDA’s first glimpse into the 2021/22 advertising 12 months predicts smaller provides, larger home use, decrease exports and lowered shares. All-wheat yield estimates rose 0.3 bushels larger year-over-year to 50.0 bushels per acre. Home use is anticipated to rise 6%, primarily because of larger feed, residual and meals use. Meals use might rise one other 3 million bushels to 963 million bushels, and annual feed and residual use is projected at 170 million bushels – the best degree in eight years.
Exports are anticipated to say no 65 million bushels to a complete of 900 million bushels, nonetheless. Nonetheless, ending shares are anticipated to say no 11% to 774 million bushels, falling to a seven-year low. Analysts have been anticipating a sharper decline, with a mean commerce guess of 730 million bushels.
USDA initiatives the season-average farm value for wheat at $6.50 per bushel, which might symbolize a year-over-year enhance of $1.45, if realized, which the company says can be because of “reduced stocks and significantly higher U.S. corn prices.”
World shares for 2021/22 are at 10.837 billion bushels, in line with USDA. That was larger than the typical commerce guess of 10.812 billion bushels.