Neutral numbers on big report day

By Doug Tenney, Leist Mercantile

Finally. USDA report day. Producers and traders alike have been long awaiting this day. Some call this day the most important USDA report day. One thing is for certain, USDA released a plethora of numbers today at 12 noon eastern time. 

Today, the numbers are not contained in one report. Rather there are 3 separate reports to review, including: The Monthly WASDE Report (supply and demand), Quarterly Grain Stocks, and Winter Wheat Acres. While not a separate report, traders will view with great interest corn and soybean production in Brazil and Argentina. The big unknown includes, how the market views all 3 reports in totality. 

After the noon report was released, corn was down 3 cents, soybeans down 1 cent, and wheat  down 15 cents. Just before the report, corn was down 3 cents, soybeans down 5 cents, and wheat down 4 cents.

One thing is almost certain today. USDA will not be punting as they did in December. At that time U.S. corn and soybean export numbers were unchanged, as well as corn for ethanol and soybeans crushed. Instead, there will be many changes today.

Ranking the numbers for today in importance would be: First, U.S. ending stocks, second, U.S. 2021 corn and U.S. 2021 soybean production.

USDA put U.S. corn ending stocks at 1.540 billion bushels, U.S. soybean ending stocks at 350   million bushels, and U.S. wheat ending stocks at 628 million bushels. 

Trader estimates for U.S. corn ending stocks were 1.472 billion bushels. USDA last month had corn ending stocks at 1.493 billion bushels. Soybean ending stocks trader estimates were 348 million bushels. Last month USDA was 340 million bushels. Trade estimates for wheat ending stocks were 608 million bushels. USDA last month was 598 million bushels.

USDA estimated the U.S. 2021 corn production at 15.115 billion bushels and the U.S. 2021 soybean production at 4.435 billion bushels. The U.S. corn yield was 177.0 bushels per acre. Last month was 177 bushels per acre. The US soybean yield was 51.5 bushels per acre. Last month was 51.2 bushels per acre.

Trader estimates for US 2021 corn production was 15.069 billion bushels. Last month USDA was 15.062 billion bushels. The trader estimates for US 2021 soybean production was 4.433 billion bushels. Last month USDA was 4.425 billion bushels.

Traders are also expecting Brazil soybean production to be reduced. Last month USDA published the Brazil soybean production at 144 million tons. CONAB which is Brazils equal to our USDA, earlier this week estimated Brazil’s soybean production at 140.5 million tons. Private estimates in the past week have suggested Brazil’s soybean production could be cut 10 million to 14 million tons. Those are worst case numbers, don’t expect USDA to reduce soybean production anywhere near that 14 million tons. Rather, I would expect the number to be at 140 million tons or higher.

Trader estimates put Brazil’s soybean production at 141.62 million tons, the range was 140 million 144 million tons. Those trader estimates for Argentina’s soybean production was 48.11 million tons. USDA estimated the Brazil soybean production at 139 million tons and the Argentina soybean production 46.5 million tons.

Bear in mind that if traders and producers are looking for big changes in numbers compared to last month, they are setting themselves up for severe disappointment. A common thread in the markets this past week has been that traders were looking for bearish numbers in order to buy corn and soybeans lower.

U.S. grain stocks as of Dec. 1, 2021, had corn at 11.6 billion bushels, soybeans at 3.15   billion bushels and wheat stocks of 1.39 billion bushels. Trader estimates were 11.602 billion bushels for corn, 3.129 billion bushels for soybeans, and 1.421 billion bushels for wheat.

U.S. winter wheat acres were expected to be above those of last year.

The market will quickly refocus after the noon report and go back to trading weather, South America weather as well as the U.S. Plains.

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