Home Farm Equipment What did USDA’s most recent report tell us?

What did USDA’s most recent report tell us?


Corn costs fell barely final Friday regardless of a pleasant USDA Supply and Demand report.

Ending 20-21 U.S. corn shares had been diminished 150 million to 1.352 billion bu. as a result of elevated use forecasts in all three demand classes:

  • Feed/residual use was up 50 mbu.;
  • Ethanol grind raised 25 greater and
  • Exports had been 75 million bigger versus final month.

The web was a barely bigger discount in ending shares versus the common commerce estimate, which had pegged carry-out at 1.379 billion.

Regardless of a considerably pleasant report on paper, Might corn closed 2 ½ cents decrease on the day of the report at $5.77 ¼.

The export estimate rose from 2.6 bbu in March to 2.675 this month however stays under a number of commerce estimates that are within the 2.85 to 2.9 (or greater) vary.

USDA’s China forecast

The commerce is having problem reconciling the USDA export forecast for Chinese language corn imports of 24 million metric tonnes (945 mbu) and the truth that year-to-date “known” purchases from the U.S. are on the order of 920 million bushels. And individually, Ukraine exports to China within the 20-21 crop yr are possible approaching 200 mbu. So, it might seem there’s room for one more 200-225 enhance within the export forecast within the coming months.

The rise in each feed/residual and meals/seed/industrial consumption had been maybe a shock to the commerce, however the former was justified by the March 1 corn shares whole, in keeping with USDA, as that got here in some 70 million bushels BELOW commerce common. Consequently, feed/residual use was bumped 50 million to five.7 billion. The shares report, together with disappearance in the course of the 1st quarter, places feed/residual use for the primary half of the yr 80-90 mbu greater than the 19-20 tempo.

Corn vs. wheat feeding

Market concern for corn demand for the rest of the yr facilities round elevated wheat feeding in the course of the summer time months. For comparability, the implied stability of the yr corn feed quantity utilizing the USDA forecast is about 300 mbu BELOW final yr so it might seem the potential for better wheat feeding has been fairly nicely factored in.

As for ethanol, a robust efficiency for the sector in the course of the month of March based mostly on weekly information supplied by the Division of Power inspired a lift within the ethanol grind forecast by 25 million bushels, to 4.975 billion. That is now about 120 mbu greater than final yr’s use because the U.S. continues to get well from the demand dampening results of COVID-19.

All in all, the most recent USDA carry-out estimate of 1.352 bbu nonetheless has room for additional draw back of round 225-250 mbu which might put 20-21 shares at 1.1 bbu. But there’s nonetheless a good quantity of uncertainty for my part within the weeks forward concerning the scale of the Brazilian corn crop which might have a bearing on U.S. exports in July and August and extra so in the course of the first half of the 21-22 advertising yr (the USDA left its forecast at 109; the commerce is leaning some 4 million or so million tonnes smaller). 

Soybeans shares unchanged

U.S. soybean carry-out within the April S&D report did not change (ending shares remained at 120 mbu; commerce, 118) however the USDA did tweak crush (down 10 on easing home meal demand), diminished residual use by 17 on account of greater than anticipated March 1 shares, and added 30 to its export forecast. Nevertheless, the negatives got here from a 2 MMT bigger Brazil crop (although Argentina/Paraguay had been collectively), down 1 and whereas China’s imports had been unchanged at 100 MMT, crush was scaled again by 2, to 96.0. 

Acreage selections loom massive

The potential impression of the quantity of U.S. corn acres planted, rising season improvement, and potential yield, will loom massive within the weeks forward. On the identical time, there’s an acute battle for soybean acres because the latter’s stability sheet is the tightest ever heading into new crop.

Additionally, international stocks-to-use ratios of each corn and soybeans have been trending downward in recent years and within the case of corn, this yr’s projected 10.2% world stocks-to-use ratio is the 4th lowest of the previous 50 years and soybeans, at 21.7%, is at a 21-year low. Thus, development line corn yields are virtually important within the U.S. this summer time. Additional, new crop shopping for of U.S. soybeans is off to a formidable begin (China), suggesting that barring a serious outbreak of ASF in that nation, the world’s largest soybean importer will likely be again within the U.S. market this fall in a fairly large manner. China demand is unsure; a 6 MMT improve in South American soybean manufacturing this yr (offering present estimates maintain) and a really tight U.S. new crop soybean stability sheet possible means continued volatility as nicely.   

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The opinions of the writer usually are not essentially these of Farm Futures or Farm Progress. 


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