Market Analysis

The USDA generally followed its traditional December approach to its US supply/demand updates. As expected, the World Board left its US corn and soybean balance sheets unchanged with no quarterly stocks to report this month and the US final production numbers not available until January. This wasn’t the case for wheat’s US balance sheet. The USDA sliced 2021/20’s exports & lowered imports resulting in a modest increase in this food grain’s ending stocks.

In wheat, increases in Australian, Canadian, and Russian crops totaling 4.15 mmt were the reason for this month’s 20 million US export decrease even if Iran’s crop was sliced by 1.5 mmt. The USDA upped its world carryover estimate by 2.4 mmt to 278.2 mmt, However, this year’s world stocks are 11.4 mmt lower than last year and the smallest in 5 years. The USDA did cut 5 million bu.in US imports. This limited this month’s ending stock adjustment to just 15 million bu and a revised wheat carryover of 598 million bu, This year’s ending stocks remain the lowest of the last 8 crop seasons.

Despite October’s record US soybean crush, the World Board left beans domestic demand unchanged this month at 2.19 billion bu. The committee also took a similar approach in their overseas demand outlook leaving US exports at 2.05 billion after November’s decrease. After China dropped its soybean output earlier this week, the USDA sliced its 2021 estimate from 19 to 16.4 mmt today. However, they left Argentina's & Brazil’s bean crops unchanged vs November.

As anticipated, the USDA didn’t change its 2021/22 US corn supply/demand data this month. Despite strong pro-cessing margins continuing at US ethanol plants, this month’s biofuel demand was left unchanged at 5.25 billion after last month’s 50 million bu increase. Sluggish US shipments have prompted trade concerns about corn’s export out-look even with previous Chinese purchases, but the World Board left this foreign demand unchanged. A sizable Mexi- can purchase this week was also supportive to this feed- grain’s overseas demand outlook. This year’s building La Nina weather trend may still impact S. America’s corn output.

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What’s Ahead

The latest US & World S&Ds didn’t tighten the major crops supplies this month disappointing some traders initially. The current Black Sea political tensions, the ongoing La Nina weather pattern im- pact on S Am crops & Omicron’s effect on the COVID pandemic will likely be market factors as 2021 winds down. Still like 50-60% corn & bean sales at $5.85-95 & $12.75-85 & 10% in 2022. Hold wheat sales.