By Doug Tenney, Leist Mercantile
There was some disappointment that soybean production for Brazil was unchanged. Argentina was down 1 million tons. Corn production for both was unchanged.
U.S. corn and soybean ending stocks along with SA corn and soybean production were the main features with this report. U.S. demand, especially exports, and South America weather have been the big price drivers for the past month.
Corn ending stocks were 1.702 billion bushels. Last month they were 1.702 billion bushels. Soybean ending stocks were 175 million bushels. Last month soybean ending stocks were 190 million bushels. Soybean crush was up 15 million bushels, soybean exports unchanged. Corn exports and ethanol demand were unchanged. China corn imports were up 3.5 million tons to 16.4 million tons with last month at 13 million tons.
The average trade estimate for U.S. grains ending stocks were: Corn 1.691 billion bushels, soybeans 168 million bushels, wheat 874 million bushels.
The report today used the same U.S. corn and soybean production numbers and yields as last month. This has been the normal practice for decades with the December WASDE report.
Shortly after the report was released, corn was unchanged, soybeans up 6 cents, and wheat up 8 cents. Just before the report release, corn was up 3 cents, soybeans up 16 cents, and wheat up 12 cents.
Don’t be surprised to see U.S. corn and soybean exports in the monthly tables increase in the months ahead. Here’s why. The U.S. corn export values continue to be the cheapest in the world and have been for many weeks. China has already bought U.S. corn for next April and May. Brazil is out of soybeans for export into at least early February. Soybean production is expected to decline for both Brazil and Argentina.
Earlier this week on Monday, the weekly export inspection report had 84.4 million bushels of soybeans exported from the U.S. With those exports, a new 2-week record was set for U.S. soybean exports. This provides strong evidence U.S. soybean exports will increase in coming months.
The past two weeks there have been private estimates of U.S. soybean ending stocks declining to somewhere from 60-160 million bushels. Pipeline for soybeans is around 100 million bushels. It would be highly unlikely for USDA to publish a number below 100 million bushels.
Today’s report will be the last production and yield report for 2020. The final 2020 production and yield report for corn and soybeans will be January 2021.
Expect South America weather to be a dominant feature into next year. Russia’s wheat entered dormancy in poor condition and dry weather in the weeks which followed will not be improving wheat conditions.