Plus – an unique preview at at the moment’s USDA studies
- Corn up 1 cent
- Soybeans down 3-7 cents, soymeal down $0.20/ton, soyoil down $0.02/lb
- Chicago & Kansas Metropolis wheat up 3-4 cents; Minneapolis wheat up 2-7 cents
*Costs as of 6:50 am CDT.
Joyful WASDE day! USDA releases its August 2021 Crop Manufacturing and World Agricultural Provide and Demand Estimates (WASDE) studies at the moment at 11am CDT. Whereas U.S. crop yields and provides will take heart stage, there are a number of different components farmers ought to control.
Here’s a condensed preview of what to anticipate in at the moment’s report. For the whole article, try my newest E-corn-omics article. Whole Farm Advertising and marketing’s Naomi Blohm additionally gives some eager insights about provide metrics within the newest Ag Marketing IQ column.
USDA releases each the WASDE and Crop Manufacturing studies at 11am CDT. Farm Futures gives reside protection of the newest estimates and ongoing report evaluation in actual time on our web site, FarmFutures.com, and likewise through social media (@FarmFutures).
2021 yield and provide projections
The August 2021 Farm Futures survey predicted 2021 corn yields would are available at 178.7 bushels per acre, which might finest 2017’s yield of 176.6bpa as the biggest on report. Learn extra particulars in regards to the supply and demand impacts of those estimates here.
Utilizing USDA’s present estimate of 88.5 million acres of corn anticipated to be harvested for grain this fall, 2021 corn manufacturing is estimated at 15.1 billion bushels – about 63.5 million bushels decrease than USDA’s present 2021 manufacturing estimate. It’ll seemingly path the 2016 harvest of 15.1 billion bushels because the second largest on report by a margin of 44.7 million bushels.
Holding 2021/22 corn utilization charges fixed at 14.84 billion bushels, Farm Futures’ yield estimate of 178.7 bpa would seemingly shrink obtainable corn provides by 63.5 million bushels. That would depart ending shares at 1.37 billion bushels, shrinking USDA’s present shares to make use of ratio for 2021/22 from 9.6% to 9.2%.
Corn shares are anticipated to shrink to the second tightest stage within the final 60 years by the point the 2020/21 advertising yr ends on the finish of this month, a results of aggressive 2020/21 exports and two earlier years of crop shortfalls.
Farm Futures’ August 2021 survey finds U.S. farmers count on to reap a median of 51.3 bpa from the 2021 soybean crop. That yield would observe 2016’s ranking of 51.9 bpa because the second largest yield in historical past.
The success of the 2021 soybean crop might be depending on how vast the yield variance finally ends up between the Higher Midwest and the remainder of the Corn Belt. Scattered showers have fallen within the Northern Plains in current weeks, which can seemingly help peak pod growth over the subsequent week although the showers are seemingly not sufficient to considerably cut back the area’s drought classifications.
Farm Futures’ 51.3 bpa 2021 soybean yield estimate would place the 2021 soy crop at 4.45 billion bushels, about 41.8 million bushels greater than USDA’s present projection. If realized, that complete would finest 2018’s report haul of 4.43 billion bushels as the biggest U.S. soy crop ever.
Offered USDA doesn’t replace demand estimates in subsequent week’s WASDE report, leaving 2021/22 utilization charges at 4.42 billion bushels, new crop ending shares will enhance from 156 million bushels to 198 million bushels.
The additional bushels forecasted by Farm Futures are usually not prone to linger lengthy available on the market although. With USDA forecasting 2021/22 soybean utilization at a record-setting 4.42 billion bushels, exporters and home processors are prone to have interaction in stiff competitors as crops are harvested this fall.
The sturdy demand projection will maintain 2021/22 shares to make use of ratio at a good 4.5% regardless of the elevated manufacturing forecast from Farm Futures. Soybean shares are set to finish 2020/21 on the second tightest quantity up to now 58 years, whereas 2021/22’s forecasted shares to make use of ranking of 4.5% will the fourth tightest throughout the identical time interval.
Potential demand changes?
Many of the focus in tomorrow’s report will heart on up to date provide estimates. Although it could not be unreasonable to see USDA make changes to utilization components.
For corn, market watchers will control any export changes USDA decides to make to 2020/21 shipments. Unprecedented Chinese language export demand despatched 2020/21 corn exports to new heights, with 32% of present yr corn shipments destined for China. However over the previous 5 weeks, shipments to Central America and Southeast Asia have eased, which could lead on USDA to trim its 2.85-billion-bushel forecast for 2020/21 corn exports.
Soybean crush charges may take one other hit in tomorrow’s WASDE report. USDA has already trimmed 30 million bushels from 2020/21 crush charges over the previous two months as low provides and excessive costs power processors to gradual manufacturing charges.
Final week’s Oil Crushing report from USDA instructed this pattern may proceed because the 2020/21 advertising yr crawls to an in depth. The June 2021 crush quantity stood just below 162 million bushels -the lowest of the advertising yr and the smallest month-to-month crush recorded since June 2019.
Wheat takes heart stage
Markets might be preserving an in depth eye on any USDA-WAOB changes to world wheat provides in tomorrow’s report. Smaller crops anticipated in Canada, Russia, the European Union, and the U.S. as a consequence of a mix of drought and unfavorable harvest circumstances are prone to trim world inventory volumes for 2021/22.
These 4 nations are the world’s largest wheat exporters. They mixed final yr to account for 61% of world wheat exports, so this yr’s crop shortfalls could have a big influence on world commerce flows within the coming months.
With smaller crops and better costs, additionally it is seemingly that USDA-WAOB will cut back world wheat feeding estimates in favor of cheaper and extra available corn crops. As wheat costs rise, livestock feeders traditionally flip to corn as a extra reasonably priced possibility for feed rations.
Chinese language wheat and corn manufacturing may even be carefully watched in tomorrow’s report to offer early indicators about new crop corn and wheat export flows throughout the globe. At first of the yr China introduced that prime precedence could be given to growing home grain manufacturing and procurement as its home utilization charges proceed to climb quicker than its farmers are in a position to plant. This spring, the Chinese language authorities really helpful livestock and poultry producers substitute soy substances in feed rations with cheaper grain provides as excessive soy costs proceed to strain crush margins.
Latest U.S. corn and wheat exports recommend that Chinese language livestock feeders have been taking this recommendation to coronary heart, however for how lengthy will the shift in buying and selling patterns final? Merchants are seemingly to reply to any important modifications in Chinese language corn and wheat import forecasts in tomorrow’s report, which is probably going so as to add to any market volatility ensuing from tomorrow’s knowledge replace.
World soybean shares are usually not prone to considerably change – until USDA’s 2021 U.S. yield forecast goes larger than the present estimate of fifty.8bpa. Lingering results from drought in Argentina may see USDA trimming Argentina’s 2021/22 soybean crop by 275 million bushels, although with the crop not even within the floor, this forecast could possibly be untimely.
Excessive world demand for soybeans in 2021/22 will maintain costs at worthwhile ranges within the coming months. That outlook may shift on any modifications to Chinese language import forecasts or if Brazil experiences any points with its crop this yr.
Brazil is at the moment forecasted to reap an enormous 5.3 billion bushels of soybeans subsequent spring, which may weaken U.S. costs at the moment if China’s hog herd doesn’t revert again to soy-laden diets.
Additionally value a learn
Farm Futures contributing analyst Bryce Knorr summarizes the outcomes of the annual grain storage abstract in a current Ag Marketing IQ column. The outcomes could shock farmers as storing grain unhedged – the preferred advertising technique within the survey – didn’t really generate the biggest revenue in 2020/21. Knorr digs into the outcomes and gives steerage on advertising for the 2021/22 season within the article.
The Farm Futures August 2021 survey results are reside on our website! Farmers don’t count on income to vary considerably in 2022 in comparison with 2021 and our outcomes clarify why. Survey respondents additionally supply contemporary insights about 2021/22 advertising plans and enter pricing methods.
The Senate handed an infrastructure invoice on Tuesday, which can now head to the Home of Representatives for remaining passage. The INVEST in America Act, a bipartisan invoice largely supported by the agricultural neighborhood, will make investments as much as $1 trillion to fortify our nation’s roads and bridges ($110B), broadband entry ($65B), ports and inland waterways ($17B), and growing old dams and canals ($8 billion). Click here for extra details about the invoice and its impacts to agriculture.
Corn costs inched a penny larger in a single day as merchants await outcomes from at the moment’s USDA studies. Merchants are eagerly anticipating USDA’s up to date forecasts for Brazilian corn manufacturing after the crop suffered harm from frost, drought, and delayed planting.
As its soy crush margins proceed to tighten, China lowered soybean import estimates for 2020/21 in a single day to mirror decrease demand within the upcoming advertising yr. China’s Ministry of Agriculture and Rural Affairs trimmed its estimate by almost 2% to three.62 billion bushels. USDA estimates for Chinese language imports at the moment stand at 3.78 billion bushels.
Chicago soybean futures drifted decrease consequently, down $0.03-$0.06/bushel forward of at the moment’s studies from USDA. The losses had been capped by a flurry of enormous every day export gross sales reported by USDA from Chinese language and unknown consumers over the previous week.
Wheat costs climbed $0.02-$0.07/bushel in a single day as markets anticipate smaller 2021 wheat shares after manufacturing on the earth’s 4 largest exporters (Russia, the E.U., U.S., and Canada) is anticipated to be trimmed following unfavorable climate and yields in at the moment’s WASADE studies.
The Higher Midwest and Northern Plains will see temperatures dip again down into the 80s at the moment, in keeping with NOAA’s short-range forecasts. Extra showers are on the best way for the Central Plains and Jap Corn Belt starting at the moment and lasting by way of the weekend. Count on as much as an inch of accumulation over the subsequent 24 hours.
It’ll be one other windy day within the Plains and Higher Midwest at the moment. Gusts are anticipated to succeed in over 30 mph in North Dakota, whereas neighboring areas are prone to see gusts high out round 25 mph.
Inflation knowledge launched yesterday by the Labor Division confirmed one other month of excessive inflationary pressures. In July 2021, client costs rose 5.4% over costs the identical time a yr prior, matching June 2021 inflation charges.
Regardless of the upper inflation readings, continued sturdy earnings outcomes continued to energy U.S. shares larger this morning. S&P 500 futures rose 0.05% to $4,443.00 eventually look.
|Morning Ag Commodity Costs – 8/12/2021|
|Contract||Items||Excessive||Low||Final||Internet Change||% Change|
|SEP ’21 CORN||$ / BSH||5.5775||5.525||5.5675||0.005||0.09%|
|DEC ’21 CORN||$ / BSH||5.6075||5.5575||5.6||0.0075||0.13%|
|MAR ’22 CORN||$ / BSH||5.6825||5.6325||5.675||0.005||0.09%|
|MAY ’22 CORN||$ / BSH||5.725||5.685||5.72||0.0025||0.04%|
|JUL ’22 CORN||$ / BSH||5.7375||5.6925||5.7275||0.0025||0.04%|
|SEP ’22 CORN||$ / BSH||5.3225||5.2925||5.315||-0.005||-0.09%|
|DEC ’22 CORN||$ / BSH||5.1725||5.145||5.165||-0.0125||-0.24%|
|AUG ’21 SOYBEANS||$ / BSH||14.115||14.0175||14.0175||-0.0375||-0.27%|
|SEP ’21 SOYBEANS||$ / BSH||13.4675||13.365||13.4225||-0.0475||-0.35%|
|NOV ’21 SOYBEANS||$ / BSH||13.395||13.3025||13.355||-0.045||-0.34%|
|JAN ’22 SOYBEANS||$ / BSH||13.43||13.3475||13.4025||-0.0425||-0.32%|
|MAR ’22 SOYBEANS||$ / BSH||13.3925||13.3225||13.3575||-0.055||-0.41%|
|MAY ’22 SOYBEANS||$ / BSH||13.3925||13.3225||13.36||-0.055||-0.41%|
|JUL ’22 SOYBEANS||$ / BSH||13.395||13.31||13.3575||-0.045||-0.34%|
|AUG ’22 SOYBEANS||$ / BSH||13.165||13.1425||13.165||-0.055||-0.42%|
|SEP ’22 SOYBEANS||$ / BSH||12.7675||#N/A||12.7925||0||0.00%|
|AUG ’21 SOYBEAN OIL||$ / LB||63.53||63.53||63.53||0||0.00%|
|SEP ’21 SOYBEAN OIL||$ / LB||62.74||62.06||62.33||0.11||0.18%|
|AUG ’21 SOY MEAL||$ / TON||355.2||355.2||355.2||-0.2||-0.06%|
|SEP ’21 SOY MEAL||$ / TON||353.9||351.4||353.3||-0.6||-0.17%|
|OCT ’21 SOY MEAL||$ / TON||352.7||350.2||352||-0.7||-0.20%|
|DEC ’21 SOY MEAL||$ / TON||356.5||353.9||355.5||-1||-0.28%|
|JAN ’22 SOY MEAL||$ / TON||356.6||354.6||356||-0.8||-0.22%|
|SEP ’21 Chicago SRW||$ / BSH||7.3275||7.23||7.285||0.015||0.21%|
|DEC ’21 Chicago SRW||$ / BSH||7.4475||7.35||7.4075||0.015||0.20%|
|MAR ’22 Chicago SRW||$ / BSH||7.5425||7.4475||7.5025||0.0125||0.17%|
|MAY ’22 Chicago SRW||$ / BSH||7.5675||7.485||7.5275||0.0075||0.10%|
|JUL ’22 Chicago SRW||$ / BSH||7.28||7.2||7.2475||-0.015||-0.21%|
|SEP ’21 Kansas Metropolis HRW||$ / BSH||7.1525||7.065||7.115||0.0125||0.18%|
|DEC ’21 Kansas Metropolis HRW||$ / BSH||7.27||7.185||7.2325||0.0125||0.17%|
|MAR ’22 Kansas Metropolis HRW||$ / BSH||7.3525||7.28||7.32||0.01||0.14%|
|MAY ’22 Kansas Metropolis HRW||$ / BSH||7.3775||7.32||7.34||0.0025||0.03%|
|JUL ’22 Kansas Metropolis HRW||$ / BSH||7.125||7.0625||7.1||-0.0175||-0.25%|
|SEP ’21 MLPS Spring Wheat||$ / BSH||9.2025||9.1||9.2||0.07||0.77%|
|DEC ’21 MLPS Spring Wheat||$ / BSH||9.0625||8.96||9.0575||0.0525||0.58%|
|MAR ’22 MLPS Spring Wheat||$ / BSH||8.925||8.86||8.9225||0.0175||0.20%|
|MAY ’22 MLPS Spring Wheat||$ / BSH||8.7775||8.765||8.765||-0.035||-0.40%|
|JUL ’22 MLPS Spring Wheat||$ / BSH||8.6725||#N/A||8.67||0||0.00%|
|SEP ’21 ICE Greenback Index||$||92.96||92.845||92.96||0.042||0.05%|
|SE ’21 Gentle Crude||$ / BBL||69.62||68.77||68.97||-0.28||-0.40%|
|OC ’21 Gentle Crude||$ / BBL||69.39||68.55||68.74||-0.28||-0.41%|
|SEP ’21 ULS Diesel||$ /U GAL||2.1136||2.091||2.0965||-0.0093||-0.44%|
|OCT ’21 ULS Diesel||$ /U GAL||2.1157||2.0949||2.0976||-0.0117||-0.55%|
|SEP ’21 Gasoline||$ /U GAL||2.31||2.2833||2.286||-0.0162||-0.70%|
|OCT ’21 Gasoline||$ /U GAL||2.1565||2.131||2.1331||-0.0158||-0.74%|
|AUG ’21 Feeder Cattle||$ / CWT||0||#N/A||158.775||0||0.00%|
|SEP ’21 Feeder Cattle||$ / CWT||0||#N/A||162.825||0||0.00%|
|AU ’21 Dwell Cattle||$ / CWT||0||#N/A||122.95||0||0.00%|
|OC ’21 Dwell Cattle||$ / CWT||0||#N/A||127.575||0||0.00%|
|AUG ’21 Dwell Hogs||$ / CWT||0||#N/A||109.625||0||0.00%|
|OCT ’21 Dwell Hogs||$ / CWT||0||#N/A||85.85||0||0.00%|
|AUG ’21 Class III Milk||$ / CWT||16.19||16.19||16.19||0.05||0.31%|
|SEP ’21 Class III Milk||$ / CWT||17.24||17.24||17.24||0||0.00%|
|OCT ’21 Class III Milk||$ / CWT||17.5||17.5||17.5||0||0.00%|