July 25, 2021

USDA keeps price projections unchanged

WASHINGTON — With a few minor tweaks in the U.S. Department of Agriculture’s supply and demand estimates on June 10, the trade now turns its focus on weather and the upcoming acreage and grain stocks reports.

Here’s a summary of the supply and demand report.

Corn: The 2021-2022 season-average farm price projection was unchanged at $5.70 per bushel. Why?

• Beginning stocks are down 150 million bushels reflecting projected increases for 2020-2021 in corn used for ethanol and exports.

• Corn used for ethanol was increased by 75 million bushels based on the most recent data from the grain crushings and co-products production report and weekly ethanol production and refiner and blender net inputs data during May which indicate demand is almost back to levels seen prior to COVID-19.

• Exports were increased by 75 million bushels based on export inspection data for the month of May that implies continued robust global demand for U.S. corn, despite high prices.

• With no use changes for 2021-2022, ending stocks were reduced by 150 million bushels to 1.357 billion bushels.

• Brazil corn production for 2020-2021 was reduced on lower yield expectations for second-crop corn based on below-normal rainfall in the center-west and south during the month of May. Partly offsetting is greater indicated area for the second and third crops.

• Foreign corn ending stocks for 2021-2022 were hiked relative to last month, mostly reflecting increases for Pakistan and South Africa that are partly offset by a reduction for Canada.

Soybeans: USDA kept the 2021-2022 season-average price forecast at last month’s level of $13.85 per bushel. Why?

• USDA reduced soybean crush for 2020-2021 by 15 million bushels to 2.175 billion based on a lower forecast for soybean meal domestic disappearance and higher soybean meal imports.

• Soybean oil exports for 2020-2021 were lowered 400 million pounds to 1.9 billion as high U.S. prices reduce competitiveness in the world market.

• Soybean oil domestic disappearance was increased 225 million pounds, reflecting strong consumption to date.

• With higher soybean beginning stocks and no use changes for 2021-2022, ending stocks are projected at 155 million bushels, up 15 million from last month.

• Global 2021-2022 soybean ending stocks were raised by 1.5 million tons to 92.6 million, driven by higher beginning stocks for the United States and Brazil.

• Brazil’s 2020-2021 soybean production was increased 1 million tons to 137 million, mainly on higher yields for Mato Grosso do Sul.

Wheat: Following suit from corn and soybeans, USDA kept the projected season-average price at $6.50 per bushel. Why?

• All wheat production is projected at 1.898 billion bushels, up 26 million from last month on increased hard red winter and soft red winter production more than offsetting lower white winter production.

• The all wheat U.S. average yield is projected at 50.7 bushels per acre, up 0.7 bushels from last month.

• Beginning stocks declined due to higher 2020-2021 exports, which were raised 20 million bushels to 985 million, primarily on larger recent monthly exports.

• Feed and residual use was hiked by 10 million bushels to 180 million on the higher supplies as wheat is expected to be priced competitively with corn in the summer months.

• Projected 2021-2022 ending stocks were lowered 4 million bushels to 770 million, down 10% from the revised 2020-2021 ending stocks.

• The estimated 2021-2022 world consumption was raised 2.4 million tons to a record 791.1 million, primarily on higher feed and residual use by the European Union and Russia on increased supplies.

• Projected 2021-2022 global trade was increased by 0.8 million tons to a record 203.2 million, on increased exports by Ukraine and India.

• 2021-2022 world ending stocks were raised 1.8 million tons to 296.8 million with China accounting for 48% of the total.

Corn (2021-2022 marketing year)

Total corn supply: 16.122 billion bushels

Exports: 2.45 billion bushels

Feed, residual use: 5.7 billion bushels

Food, seed, industrial use: 6.615 billion bushels

Ethanol and byproducts: 5.2 billion bushels

Ending U.S. corn stocks: 1.357 billion bushels

Soybeans (2021-2022 marketing year)

Total soybean supply: 4.575 billion bushels

Seed, residual: 119 million bushels

Exports: 2.075 billion bushels

Crush: 2.225 billion bushels

Ending U.S. soybean stocks: 155 million bushels

Tom Doran

Field Editor