Jan 08, 2021

Markets Anticipate Friendly USDA Data Next Week

U.S. corn and soybean stocks are expected to be lower versus December

Trade Expectations for USDA’s Tuesday Reports

  • The trade on average is looking for supportive reports.
  • U.S. corn and soybean stocks are expected to be lower versus December.
  • Global stocks for corn, soybeans, and wheat are forecast to be cut.
  • Combined corn and soybean crops in Argentina and Brazil both are forecast to be trimmed from December’s outlook.
  • USDA also will provide revised estimates for U.S. corn and soybean production with the market leaning towards slightly lower crops.
  • U.S. winter wheat area is expected to be up versus a year ago.

FBN’s Take On What It Means: While the market is looking for supportive numbers in Tuesday’s reports, a lot of the risk to lower supplies is built into the market. It likely would take a sharp reduction in supplies to push the market a lot higher. Plus, with the market bulled up, we could be more sensitive to downside risks if perhaps changes are minor or no large cuts are made to supplies. However, we lean towards no big losses in prices for now.

FBN

Weekly Export Sales Slow

  • Net soybean export sales for 2020/21 were just 1.4 million bushels, sharply below market expectations.
  • China bought 13.6 million bushels which were more than offset by cancellations for unknown destinations of 28.3 million bushels.
  • For 2021/2022, soybean export sales of 2.9 million bushels were mostly to China (2.3 million).
  • Corn export sales of 29.5 million bushels were in the lower end of market expectations.
  • Wheat export sales also came in lower than expected at 10.1 million bushels.
  • China bought 1.7 million bushels HRS, 110,000 HRW, and 184,000 white wheat.
  • Upland cotton sales of 153,100 Running bales were down 47% from the previous week and 60% below the 4-week average.

FBN’s Take On What It Means: Export sales for the holiday shortened week were even lower than most reduced expectations. Soybean sales need to average roughly 6 million bushels/week and corn needs to average 25.7 million bushels/week through the end of the marketing year in August to meet the current USDA export projections, though they may be adjusted higher. A lack of competition from other origins should continue to favor the US through at least the next month.

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Kevin McNew

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Magazine

Marketwatch: Jan, 18

US Corn Price Idx: ZCPAUS.CM

open: 5.7667
high: 5.8486
low: 5.7266
close: 5.8288

US Soybean Price Idx: ZSPAUS.CM

open: 13.366
high: 13.376
low: 13.2328
close: 13.2696

US Hard Red Winter Wheat Price Idx: KEPAUS.CM

open: 7.3061
high: 7.3384
low: 7.2334
close: 7.2454

US Soft Red Winter Wheat Price Idx: ZWPAUS.CM

open: 7.0114
high: 7.0566
low: 6.9566
close: 7.0014