WASDE Quick Recap - Outlooks for 2021/22 Released
USDA sees bigger crops for corn, soybeans, and wheat.
The US is seen losing export share for wheat, corn, and soybean exports.
Brazil is expected to produce a massive soybean crop.
Global wheat production is seen at a record with ending stocks seen flat.
Global corn stocks are seen rising thanks to larger output.
World soybean production is seen at a record with ending stocks increasing.
But, global use is forecast to continue to rise.
US cotton production is projected to increase by 2.4 million bales to 17.0 million bales, but total supply is projected at its lowest in 5 years.
FBN’s Take On What It Means: The updates offered few surprises. Record crops were the theme which is not too surprising given the price environment. The projected carryouts for both corn and beans are forecast to rise, but still remain at relatively tight levels. Winter wheat markets could struggle with Russia set to have a massive crop and large stocks.
Soybeans Hit 9-Year High
Nearby soybean futures are trading above $16 for the first time since 2012 as stocks continue to tighten.
The record high of $17.89 was also set that year as drought conditions cut US production.
China’s expanding hog herds need soybean meal, and their imports are forecast to increase 3 million tonnes to 103 million.
In the US, the renewable diesel mandate could also have a significant impact on demand for bean oil.
Soy crush for 2021/22 is projected at 2,200 million bushels, up 35 million from this year, reflecting favorable crush margins.
Global vegetable oil ending stocks are projected at 22.4 million tons, down 3% from 2020/21 and the lowest in 11 years.
FBN’s Take On What It Means: The economic recovery from the pandemic is driving demand for agricultural goods generally, leading to tight stocks. The supply situation for beans is forecast to remain tight for a second consecutive season, even with trend yields. This leaves little room for any production problem during the growing season, and this risk should continue to support bean prices.
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