By Doug Tenney, Leist Mercantile
After the noon report was released, corn was down 4 cents, soybeans down 10 cents, and wheat down 21 cents. Just before the report, corn was up 2 cents, soybeans down 6 cents, and wheat down 13 cents.
Typically, the December WASDE Report is a boring report. Today USDA will not be providing US corn and soybean yield and production numbers, a decades old trend. USDA will insert the same numbers they published November 9. Final US corn and soybean yield and production will be published with the January 12, 2022 WASDE Report.
Trade volume at the CBOT this week has been light ahead of today’s USDA WASDE Report.
Corn for ethanol was unchanged, US soybean exports were unchanged.
US corn ending stocks for 2021-2022 were 1.493 billion bushels, last month, 1.493 billion bushels. US soybean ending stocks were 340 million bushels, last month, 340 million bushels. US wheat ending stocks were 598 million bushels, last month, 583 million bushels.
USDA today projected China would be importing 100 million tons of world soybeans. Last month it was 100 million tons.
Trade expectations for this report focus primarily on US demand along with grain production from other countries. Wheat production was expected to increase for Canada, Australia, and Argentina. Those expected increases have pressured wheat 23 cents lower this week. USDA had wheat production as follows: Canada 21.65 million tons, up .65 million tons; Australia 34 million tons, up 2.5 million tons; and Argentina unchanged at 20 million tons.
US corn demand is expected to increase as a result of more corn used for ethanol. Currently, ethanol margins are huge. The trade is expecting corn demand for ethanol to increase 50-150 million bushels. Last month corn used for ethanol was 5.25 billion bushels, up 50 million bushels from October.
The trade is expecting US soybean exports to drop 15-40 million bushels in spite of a stellar export pace this past week, reaching 82 million bushels. However, the US soybean export pace continues to lag behind that of last year, a trend beginning in September. As of Monday, December 9, US soybean exports for the year totaled 866 million bushels compared to the same time last year at 1.097 billion bushels, a decline of 231 million bushels.
The 21 day moving average for March 2022 CBOT corn is $5.81, last night it closed at $5.87 ¼. The 21 days moving average for January 2022 CBOT soybeans is $12.50, last night it closed at $12.61. March 2022 CBOT wheat has a 21 day moving average at $8.22, last night it closed at $7.94 ½.
March 2022 CBOT corn is stuck in a trading range of $5.60-$5.90 while January 2022 CBOT soybeans this past month have seen a much wider range, $11.87-$12.89.
While not a trend setter, it should be noted that Sadia Arabia, while exploring world wheat values this week, seemed more interested in new crop wheat prices, not old crop.
Soybeans crush margins have been on the defensive this past week. Soyoil as a percentage of crush is the lowest since April.
Here is a perfect example of the world changing right before our eyes. For months news headlines provided teasers that the airline industry is looking strongly at using jet fuel made 100% from vegetables oils, which could include soyoil. The fuel is called sustainable aviation fuel or SAF. History was made this month on a United Airlines flight from Chicago to Washington DC. One of its two engines flew with 100% SAF. The other engine flew with 100% traditional jet fuel. That flight received a waiver of current US regulations which permit the airline industry to only use a maximum of 50% SAF.
Sky high input costs, US grain exports, South America weather, the Russia/Ukraine border standoff, and China will be key factors to watch into 2022.