USDA Estimates 2020/21 Corn, Soybean and Wheat Ending Stocks
At the USDA’s annual Outlook Conference on Friday, the government delivered their first corn, soybean and wheat balance sheets for the 2020/21 crop year.
Corn: For 2020/21 the USDA is estimating production at 17.4 billion bushels (BBU), +1.4BBU from 2019. If realized this would be the largest corn supply on record.
The USDA is estimating both larger domestic and export demand next year.
Soybeans: The USDA is estimating 2020/21 ending soybean production at 4.2 BBU and ending stocks at 320 MBU.
The government is forecasting an increase in domestic soybean meal and oil demand.
The USDA is estimating soybean exports at just over 2 BBU.
Wheat: USDA is estimating 2020/21 all-wheat production at 1.8 BBU, down 84 MBU from the previous year.
The estimated 777 MBU ending stocks figures is the lowest since 2015 and the second sub-900 billion bushel carryout in five years.
FBN’s Take On What It Means: We believe that the USDA’s ending corn stocks figure is bearish while the soybean and wheat ending stocks can be constructive of new crop prices. We also believe that it is important to remember that USDA supply and demand reports are starting points and that there is an entire growing season ahead. Meaning we believe that the USDA’s balance sheets are organic in nature and have plenty of room to evolve. Please contact your FBN farm market advisor (FMA) to discuss how the USDA’s latest reports can impact your farm marketing plan.
China to Further Ease Restrictions on US Beef Imports
China's customs office said it had conditionally lifted a ban on beef and beef products from US cows more than 30 months old.
China first lifted a 14-year ban on U.S. beef in 2017, allowing imports of deboned and boned beef from American cows under 30 months old.
The ban following a BSE episode in the US.
China said last week that it will grant exemptions on retaliatory duties imposed against 696 US goods.
These items include agriculture products like soybeans, beef and pork.
FBN’s Take On What It Means: We believe that China’s move to soften the age requirements on US beef imports to 30 months is a positive development that can be supportive of feeder cattle prices. We believe that increased beef demand can support cattle prices which is a positive for the cow/calf operator.
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