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Old-Crop Corn Stocks Surprise of WASDE Report

USDA cut 150M bushels off total, undercutting trade expectations

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PIXABAY
PIXABAY

USDA Report Comments (June 2021 WASDE)

  • Smaller US old-crop corn stocks were the main surprise in the report.

  • USDA cut 150 million bushels off that total, undercutting trade expectations.

  • Brazil’s corn crop was cut as expected but the trade looked for a lower total.

  • Global wheat production was raised several million tonnes, and mainly for major exporters including the US, EU, Russia, and Ukraine.

  • US HRW production was raised by 40 million bushels but white wheat production was trimmed.

  • USDA boosted its forecast for EU rapeseed production, which was a surprise, but still sees the EU importing over six million tonnes for next year.

  • Brazil’s old-crop bean production was raised one million tonnes and US use was cut marginally, adding to the old-crop supplies but the situation remains tight overall for oilseeds.

  • US Cotton ending stocks were cut by 2.90 million bales, and world carryout was lowered 1.70 million to 89.30 million bales.

FBN’s Take On What It Means: The report was supportive for corn and neutral for oilseeds. For winter wheat, the report was bearish. US winter wheat futures remain overvalued in our opinion, largely supported by corn. All eyes will now be on acreage reports for the US and Canada scheduled to be issued later this month.

FBN

Argentina Crop Report

  • The Buenos Aires Grains Exchange reported 37.8% of the corn crop has been harvested so far.

  • The yields from late-planted fields in the province of Cordoba have been above expectations.

  • The exchange increased its 2020/21 corn crop projection to 48 million tonnes from 46 million previously as compared to the USDA at 47 million.

  • Argentina’s bean harvest is nearly finished at 98.9% complete, and the production forecast was held steady at 43.5 million tonnes.

  • The USDA also left its soy crop forecast unchanged this month at 47 million tonnes.

  • The Rosario Exchange expects a 2020/21 soy crop of 45 million tonnes and a 50 million tonne corn harvest.

FBN’s Take On What It Means: BAGE is at the low end of soy forecasts compared to others. Bean yields were reportedly disappointing as harvest wound up, and there appears to be little chance of a production increase. There may be room on the upside for corn as July is the main month for harvesting late planted Argentine corn, but it will likely not be enough to offset losses in Brazil.

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