Market Analysis The USDA’s Ag Outlook 2021/22 major US crops economic derived supply/demand forecasts were released last week. The DC analysts upped 2021’s US corn & soybean areas while shaving wheat plantings from their fall Baselines levels. The USDA’s 2020/21 US ending stock ideas were also smaller than the trade estimates for the 3 major crops.

Chief Economist Meyer’s 2021 plantings were mixed vs the US trade average estimates. The USDA’s corn forecast was 900,000 acres less than the trade at 92 million while soybeans were 600,000 higher than the trade’ survey at 90 million acres. Their all-wheat US plantings were half a million lower than trade ideas at 45 million. This spring’s US cotton plantings could remain at 12 million acres, while the US rice area could drop to 2.7 million, off 336,000. Overall, Meyer’s graphics suggest 2021’s US 8 major crop plantings (including small feedgrains & sorghum) could rise to 253.5 million, the highest level since 2018/19’s 253.9 million acres.

In corn, the USDA's 2021/22 balance sheet had a larger crop size, but this year’s smaller carryover & 1 bu lower trend yield (179.5) cut 405 million bu. from corn’s previous fall Baseline supplies US domestic demand was shuffled, but the USDA upped corn’s 21/22 exports by 325 million bu, given China’s current strong demand. Overall, corn’s 21/22 ending stocks outlook is only 50 million higher at 1.552 billion bu. than this year.

The USDA’s 90 million 2021 plantings and 50.8 bu. bean yield projects a 390 million bu. larger crop, but this year’s 120 million stocks (405 million lower) leaves beans 21/22 US supplies slightly smaller than now. Even with a 50 million cut in exports, soybean’s carryover will only grow 25 million bu by 2022 according to the USDA.

Strong corn (CORN) & beans (SOYB) prices prompted the USDA to slice 825,000 N Plains spring wheat (WEAT) seedings limiting US wheat area to 45 million for 21/22. These potential limited acres & a smaller carryover (192 million bu) has the USDA forecasting a 698 million 2021/22 ending stocks, the smallest level since the 2008/09 crop year.

What’s Ahead:

With the USDA projecting tight stocks to continue into 2022 for the three major US crops along with cotton (BAL) and sorghum possibly demanding my seedings, the trade near-term focus will remain on South America’s weather and harvest results.

Given the need for good US weather this spring, we would hold old-crop marketings and keep new crop sales at 20% at this time.