PDF attached
USDA released their March Prospective Plantings and March 1 Grain Stocks reports
Reaction: Bearish soybeans, supportive for corn and wheat.
USDA NASS briefing
https://www.nass.usda.gov/Newsroom/Executive_Briefings/2022/03-31-2022.pdf
Acreage for the 7 major row crops (excluding cotton) came in less than expected by only 0.3 million acres. Corn acres were by far the largest surprise, coming in at only 89.490 million, 2.5 million below trade expectations. Soybeans of 91 million were also a surprise as they came in 2.2 million above an average trade guess. The soybean area is higher than corn, second time in history, behind 2018 when a wet spring forced producers to switch from corn to soybeans. This year we think corn acres were lost in several areas as producers opted to plant other commodities, including tobacco and cotton. Sorghum at 6.2 million acres were below expectations and down roughly 15 percent from 2021. The US winter wheat area came in 1.4 million acres above trade expectations at 34.236 million acres. Spring wheat was 11.200 million acres, 600,000 below trade expectations and durum at 1.915 million, 188,000 acres below expectations. Cotton was reported at 12.234 million, above 11.220 million last year.
Percentage change heat map, y/y
Based on the latest data, following table is our prediction for US supply.
Grain stocks were 29 million bushels above expectations for soybeans, 27 million less for corn, and 20 million less for all-wheat. USDA made slight changes to December 1 soybean and corn stocks. December 1 wheat stocks were lowered 12 million bushels. We look for the “extra” soybean supply to get absorbed by exports by the end of the crop year.
For corn, implied feed demand was about 50 million bushels above expectations. For wheat, stocks are expected to remain ample and US carryout stocks could increase 15 million bushels in the April S&D update. Implied wheat for feed use was about 15 million bushels below our expectations. Note wheat stocks are lowest since 2008.
Look for the trade to continue trading Black Sea headlines but eventually we can’t ignore US weather. The Great Plains are in need of precipitation.
FI price ranges Updated 3/31/22
May corn is seen in a $6.75 and $8.10 range
December corn is seen in a wide $5.50-$8.00 range
Soybeans – November is seen in a wide $12.75-$15.50 range
Soybean meal – May $430-$500
Soybean oil – May 68.50-74.00
Chicago May $9.00 to $12.00 range, December $8.50-$11.00
KC May $9.00 to $12.00 range, December $8.75-$11.50
MN May $9.75‐$12.00, December $9.00-$11.75
Terry Reilly
Senior Commodity Analyst – Grain and Oilseeds
Futures International
One Lincoln Center
18 W 140 Butterfield Rd.
Oakbrook Terrace, Il. 60181
W: 312.604.1366
ICE IM: treilly1
Skype: fi.treilly
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Grain_Market_Snapshot033122.pdf