Neutral USDA numbers for corn and soybeans, negative for wheat

By Doug Tenney, Leist Mercantile

U.S. highlights: U.S. corn exports down 50 million bushels, U.S. corn ending stocks up 35 million bushels. U.S. soybean exports down 15 million bushels, crush unchanged, soybean ending stocks up 15 million bushels.

World highlights: Brazil soybean production 156 million tons, last month was 155 million tons. Argentina soybean production 25 million tons, last month was 27 million tons. USDA today projected China would be importing 98 million tons of soybeans during the current marketing year from September to August. Last month was 98 million tons. 

There is a very unusual, unheard of story line developing for soybeans to end the week. Soybeans are higher today on talk of U.S. grain commercials exporting U.S. soybeans into Europe for crushing. The soyoil would then be exported back to the U.S. to be most likely used as feedstock for biodiesel production. This process keeps the soymeal in Europe, helping to reduce excess U.S. soymeal stocks.

It is front page news that Ohio crops desperately need rains for corn and soybeans. But, it is not new news. Producers report that corn and soybean growth is virtually standing still due to the lack of rains for several weeks in a row. Some have slowed or even halted sidedressing corn this week due to the lack of rain. In addition, post spraying for corn and soybeans has been drastically reduced compared to past years applications at this time. Bottom line…it appears crops are doing better than expected in spite of the weeks long absence of rains.

Following the noon USDA report release, corn was down 8 cents, soybeans up 17 cents, and wheat down 7 cents. Prior to the report, corn was down 11 cents, soybeans up 14 cents, and wheat down 3 cents.

US 2022-2023 ending stocks: corn 1.452 billion bushels, last month 1.417 billion bushels; soybeans 230 million bushels, last month 215 million bushels; and wheat 598 million bushels, last month 598 million bushels. 

Trader estimates for 2022-2023 ending stocks: corn 1.449 billion bushels; soybeans 223 million bushels; wheat 606 million bushels.

U.S. 2023-2024 ending stocks: corn 2.257 billion bushels, last month 2.222 billion bushels; soybeans 350  million bushels, last month 335 million bushels; and wheat 562 million bushels, last month 556 million bushels. 

Trader estimates for 2023-2024 US ending stocks: were corn 2.254 billion bushels; soybeans 345 million bushels; and wheat 569 million bushels. 

June marks the second month for USDA to publish supply and demand tables for US 2023-2024 crops. Many were asking this past week if USDA would be reducing corn or soybean yields for crop year 2023. I was not expecting that to take place.

US corn exports were expected to be reduced 25-50 million bushels while soybean exports could be cut 15 million bushels. 

Last month the Black Sea Grain Initiative (BSGI) was extended 60 days into July 18. While not set in stone yet, it appears very likely that it will end next month. Ukraine is already anticipating that likelihood as they are moving grain via other transportation modes, mostly rail into other parts of Europe.

USDA on June 30 will provide two reports, an Acreage Report and the Quarterly Grain Stocks Report. Those reports will not detail ending stocks or exports. However, once the numbers are released you could easily see trader estimates of ending stocks based on the updated stocks numbers. 

Expect huge price volatility with weather the dominant feature the balance of June. Daily ranges for corn could exceed 15 cents while the range for soybeans could exceed 30 cents. Remember, if there is a number at which you would execute grain sales, have those numbers in as open orders with your grain merchandisers and or commodity broker, even if you think it is a stupid number and will never hit. 

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