WASDE report holds few surprises; weather remains in focus

USDA’s latest supply and demand estimates released Thursday came in about as expected, which was friendly to the corn market and quite the opposite in the soybean complex.

Ending stocks for corn declined 150 million bushels compared to last month at 1.357 billion bushels for 2021/22. Soybean ending stocks, on the other hand, climbed 15 million bushels to 155 million bushels.

“The corn numbers were about as expected as USDA decreased corn carryout 150 million bushels, split evenly with a 75-million bushel increase in both ethanol production and exports,” said Karl Setzer, AgriVisor commodity risk analyst.

“That puts (old crop) ending stocks at a pipeline 7.4% stocks to use and it carried over to new crop at a 9.2% stocks to use ratio,” the analyst noted. “It’s friendly, but not bullish.”

With higher beginning stocks and crush down 15 million bushels, the subsequent boost to ending stocks of soybeans raised the stocks to use ratios slightly to 3% for old crop and 3.5% for new crop.

“It’s still a tight number, but it’s going in the opposite direction the trade expected,” Setzer said of soy supplies. “This gives the trade an indication we maybe have seen the smallest stocks to use ratio we’ll see (this year).”

USDA trimmed its 2021-22 estimate of wheat ending stocks by 4 million bushels to 770 million.

As for production forecasts this season, USDA left its estimates unchanged for corn and soybeans, with national yields of 179.5 and 50.8 bushels per acre, respectively.

It raised the all wheat production forecast 26 million bushels from last month to 1.898 billion bushels, based on expectations of increased production of hard red and soft red wheat. The average wheat yield was pegged at 50.7 bushels per acre nationwide, up .7 of a bushel from last month.

Down south, USDA lowered its estimate of Brazilian corn production while it raised soy production there by 1 million metric ton (mmt) to 137 mmt.

The Corn and Soybean Advisor reported early safrinha (corn) yields are highly variable in Mato Grosso (64.8 to 143.1 bushels per acre) with overall corn yields in that region expected to be down 15-20% this season. Harvest of that crop is expected to linger into August.

“The takeaway for me is this (WASDE) report is done. Let’s focus on what comes out at the end of June in regard to acreage and stocks numbers,” Setzer said.

“Above and beyond that, we’ve got to look at the weather forecast,” he continued. “We’re in a weather market. Until we see a shift (and more widespread rain over the Corn Belt), I think downside is limited.”

USDA left its season-average price estimates unchanged at $5.70 per bushel for corn, $13.85 for soybeans and $6.50 for wheat.