USDA’s Quarterly Grain Shares report stunned markets at the moment after discovering 81 million extra bushels of previous crop (2020/21) soybean bushels. The discovering bucked earlier market forecasts, which have been buying and selling on the prospects of the second-tightest ending crop provide on report previous to the information launch.
Bigger than anticipated previous crop corn shares despatched Chicago corn futures barely decrease within the aftermath of the report’s launch. Nevertheless, the upper soybean shares added optimism to 2022 corn acreage expectations, sending deferred contract costs larger.
Continued downward revisions to the U.S. wheat crop despatched futures costs in Chicago, Kansas Metropolis, and Minneapolis rallying up $0.12-$0.21/bushel instantly following the report.
“USDA made a score of balance sheet revisions today that necessitated changes all the way back to fall 2020 production estimates,” notes Farm Futures grain market analyst Jacquie Holland.
Corn shares noticed a 36% year-over-year decline, falling to 1.24 billion bushels by means of Sept. 1. That was larger than commerce expectations, nonetheless, with a mean commerce guess of 1.155 billion bushels. Of the whole, 842 million bushels are being saved off the farm (down 28% from final yr), with 395 million bushels of on-farm storage (down 47% from final yr). Disappearance moved from 3.08 billion bushels a yr in the past right down to 2.87 billion bushels.
“Spring 2021 usage rates were higher than USDA indicated in its June 30 quarterly stocks update,” Holland says. “Today’s report saw USDA slash 2.7 million bushels of off-farm stocks, suggesting that rapid export paces last spring were likely more brisk than markets had originally factored. All told, stocks were not high enough to trigger a major selloff, thanks in large part to smaller beginning 2020 stocks.”
USDA additionally revised its 2020 acreage estimates, with 90.7 million planted acres and 82.3 million harvested acres and 6.71 million silage acres. Yield estimates slipped 0.6 bushels per acre decrease, to 171.4 bpa.
Soybean shares plummeted even additional, dropping 51% year-over-year to land at 256 million bushels by means of Sept. 1. Analysts anticipated a good greater discount, with a mean commerce guess of 174 million bushels. On-farm storage fell 52% to 68.1 million bushels, whereas off-farm storage fell 51% to 188 million bushels. Disappearance between June and August was for 513 million bushels, which was 40% beneath the identical interval final yr.
USDA-NASS revised 2020 soybean manufacturing 80.8 million bushels larger than its prior estimates. Planted space was revised to 83.4 million acres, with harvested space at 82.6 million acres. Yields moved 0.8 bushels per acre larger, to 51.0 bpa.
The 2020 soybean crop produced higher yields than markets had initially forecasted primarily based on up to date utilization information analyzed by USDA, Holland factors out.
“Slower exporting and crush paces this past spring were re-factored into June 1 soybean stock estimates in today’s report,” she says. “USDA added 2.5 million bushels of soybeans to June 1 stocks, pointing to lower usage rates amid high prices and seasonal shifts in Chinese export demand to cheaper Brazilian stocks.”
Wheat storage fell 18% from a yr in the past, with 1.78 billion bushels by means of Sept. 1. That was reasonably beneath the common commerce guess of 1.852 billion bushels. On-farm storage tumbled 41% to 419 million bushels, whereas off-farm shares solely dropped 6%, to 1.36 billion bushels. Disappearance from the previous three months totaled 711 million bushels, which was 2% larger year-over-year.
“USDA also added 1.4 million bushels to June 1 wheat stocks, suggesting slower than anticipated usage paces earlier this spring,” Holland provides.
USDA’s evaluation for all-wheat manufacturing in 2021 was for 1.65 billion bushels. That’s 10% beneath 2020 totals of 1.83 billion bushels, though harvested space moved 1% larger to 37.2 million acres. Common yields have been pegged at 44.3 bushels per acre – a 5.4 bpa drop from a yr in the past.
The company’s breakdown of this season’s manufacturing included:
- Winter wheat – 1.28 billion bushels (up 9%)
- Spring wheat – 331 million bushels (down 44%)
- Durum wheat – 37.3 million bushels (down 46%)
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