USDA released their December S&D report
Reaction: Slightly supportive soybeans as USDA lowered global stocks by 1.8 million tons to 102 million, 2.1 million tons below an average trade guess. Both corn and wheat world wheat stocks were reported 1.0 and 1.9 million tons above an average trade guess, which was seen bearish. Prices sold off post report but some markets rebounded shortly afterwards.
USDA NASS executive summary
https://www.nass.usda.gov/Newsroom/Executive_Briefings/index.php
USDA OCE Secretary’s Briefing
https://www.usda.gov/oce/commodity-markets/wasde/secretary-briefing
We thought the USDA reported was a little supportive soybeans as USDA lowered global stocks by 1.8 million tons to 102 million, 2.1 million tons below an average trade guess. Both corn and wheat world wheat stocks were reported 1.0 and 1.9 million tons above an average trade guess, which was seen bearish. USDA made no changes to its US corn and soybean balances. They took US wheat stocks 15 million bushels higher by lowering imports by 5 million and exports by 20 million bushels. The report was seen benign for the US balances, with exception to soybean oil, which they made several adjustments, including revising the 2021-22 SBO yield higher from 11.66 to 11.75, resulting in an increase of 200 million pounds to the production side. Domestic disappearance for US soybean oil was up 150 million pounds. 2020-21 ending stocks were revised lower by 46 million pounds as USDA increased the food use category by 46 million pounds. We were a little surprised 2020-21 biofuel use was not adjusted. There were no changes to the US soybean meal balance sheet. Back to the US soybean balance, we are surprised USDA did not adjust crush higher and lower exports. Perhaps next month after December 1 stocks are reported.
World corn production was lifted 4.1 million tons to 1.209 billion, 7.7% above 2020-21. EU corn was taken up 2.5 million to 70.4 million. Argentina and Brazil were left unchanged. Global soybean production fell 2.2 million tons to 381.8 million, 4.2% above 2020-21. China production was lowered 2.6 million tons to 16.4 MMT (following direction of CASDE report) and Paraguay was lowered 0.5 million tons to 10 MMT. USDA left soybean production unchanged for Argentina and Brazil. World wheat production was raised 2.6 million tons. Australia was lifted 2.5 MMT to 34 million and Russian wheat production was taken up 1.0 to 75.5 MMT. Canada was raised 600,000 to 21.7 MMT.
Price projections revised below.
Price outlook:
Updated 12/9/21
March corn is seen in a $5.50 (up 25) to $6.20 (down 5 cents) range
Soybeans – January $12.00 (up 25 cents) to $13.05 (up 5 cents) range, March $11.75-$13.50
Soybean meal – January $330 (up $10) to $375 (up $5), March $315-$380
Soybean oil – January 52.00 (down 200) to 59.00, March 54.00-62.00
Chicago March $7.40 (down 10 cents) to $8.60 (down 15 cents) range
KC March $7.55 (down 20 cents) to $9.00 (down 25) range
MN March $9.50‐$11.00 (unch, down 50 cents)
Terry Reilly
Senior Commodity Analyst – Grain and Oilseeds
Futures International
One Lincoln Center
18 W 140 Butterfield Rd.
Oakbrook Terrace, Il. 60181
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Skype: fi.treilly
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Grain_Market_Snapshot120921.pdf