USDA WASDE Reaction
USDA | October 12, 2021
Top Takeaways:
1. Global and domestic wheat balance sheets are tightening
2. US Soybean carry-out back above 300 million bushels
The Breakdown
Corn
’21-‘22 Ending Stocks
The USDA estimates ’21-’22 corn ending stocks[1] will be 1.5 billion bushels which is above the analyst estimate of 1.418 billion bushels according to Bloomberg. This is an increase versus last month. The resulting stocks/use ratio[2] is 10.14%. Note the five-year rolling average stocks/use ratio is 13.47%.
Production
The USDA estimates ’21-’22 corn production will be 15.019 billion bushels which is above the average analyst estimate of 14.953 billion bushels. Note that the USDA yield estimate of 176.5 is above the average analyst estimate of 175.9 bushels per acres (bpa).
Usage
The USDA estimates total corn usage of 14.78 billion bushels in the ’21-’22 crop year. This is 20 million bushels lower versus last month’s estimates.
Global
The USDA estimates ’21-’22 global corn ending stocks will be 301.74 million metric tons (MMT) which is above the average analyst estimate of 298.1 MMT according to Bloomberg.
Market Reaction
Front month corn futures had been trading lower on the session heading into the report. After an initial spike lower prices have recovered somewhat, though trade remains choppy. As of this writing front month corn futures are down approximately 1% on the session.
Wheat
’21-‘22 Ending Stocks
The USDA estimates ’21-’22 wheat ending stocks will be 580 million bushels which is slightly lower than the average analyst estimate of 582 million bushels according to Bloomberg. The resulting stocks/use ratio is down to 28.48% which is significantly below the rolling five-year average stocks/use ratio of 50.17%.
Production
The USDA estimates ’21-’22 wheat production will be 1.646 billion bushels which 51 million bushels lower versus last month.
Usage
The USDA estimates total wheat usage of 2.036 billion bushels in the ’21-’22 crop year. This number is lower versus the 2.061billion bushels estimated in the August WASDE.
Global
The USDA estimates ’21-’22 global wheat ending stocks will be 277.18 million metric tons (MMT) which is below the average analyst estimate of 281 MMT according to Bloomberg.
Market Reaction
Front month wheat futures are trading higher in the wake of the report. The bulls found some encouragement in today’s report with the USDA estimating tighter domestic and global wheat balance sheets.
Soybeans
’21-‘22 Ending Stocks
The USDA estimates ’21-’22 soybean ending stocks will be 320 million bushels which is above the average analyst estimate of 298 million bushels according to Bloomberg. The resulting stocks/use ratio is 7.2%. The rolling five-year average stocks/use ratio is 11.4%.
Production
The USDA estimates ’21-’22 soybean production will be 4.448 billion bushels which is above the average analyst estimate of 4.410 billion bushels. Note that the USDA yield estimate of 51.5 bushels per acre is higher than the average analyst estimate of 51 bushels per acre.
Usage
The USDA estimates total soybean usage of 4.399 billion bushels in the ’21-’22 crop year, 10 million bushels above the August estimate of billion bushels.
Global
The USDA estimates ’21-’22 global soybean ending stocks will be 104.57million metric tons (MMT) which is above the average analyst estimate of 100.6 (MMT) according to Bloomberg.
Market Reaction
Front month soybean futures are trading lower on the heals of the report with the trade likely focused on the USDA’s domestic and global carry-out estimates which came in higher versus expectations.
[1] Ending Stocks (also called carry-out): The amount of corn that will be available at the end of the crop year, given the estimated or actual beginning stocks, production, and usage.
[2] Stocks/Use Ratio: Ending stocks divided by total usage.