Market Analysis

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The latest US Quarterly Stocks & Small Grains reports provided some bullish surprises for both corn’s 2021 ending stocks and the size of the 2022 US wheat crop while soybean’s final stocks rose modestly from USDA’s August level for the 2021/22 crop. Despite wheat’s quarterly stocks being near expectations, the USDA’s sharp 133 million lower crop size was the reason that corn’s feed usage jumped last summer, particularly in the US Plains cattle feed yards.

Despite some earlier US wheat area & yields reductions, the USDA slashed 1.55 million harvested acres this month. 890,000 hard red acres in the US Plains lead the decline while the balance came US soft red states. These smaller acres & a 0.9 bu drop in the w. winter’s yield cut 93 million bu from the USDA’s 2022 crop to a 1.104 billion level. The USDA also decreased 2022’s spring & durum harvested areas by about 250,000 acres each. These smaller acres along with 1.6 bu lower spring wheat yield (dryness?) cut 2022’s US spring by 30 million & durum by 10 million bu vs last month. These smaller US supplies totaling 1.65 billion bu were behind wheat’s 145 million drop in feed disappearance. High prices & lack of availability were the reasons for last summer’s lowest demand in 40 years of DC data.

This year’s small US wheat crop prompted SW cattle feed yards to utilize feedgrains vs wheat.in rations. Corn’s 148 million lower ending stocks revealed this switch. A smaller 2021 US corn crop of 41 million bu (yield off 0.3 bu) & a likely 25 million lower export suggests 21/22’s 4th quarter feed use at 744 million bu vs 2021’s 617 million rate. 21/22’a smaller 1.366 billion corn stocks have already reduced US supplies & potentially tightening 22/23’s ending stocks to 1 billion bu area even without a lower US yield.

Soybeans 2021/22 ending stocks were 34 million bu higher than the USDA’s August forecast at 274 million. With limited changes in the US crush and exports, last year’s crop size was raised by 30 million with 2021’s yield being upped by 0.3 bu per acre. Overall, bean’s stock/use remains 2nd smallest since 2015/16.

What’s Ahead:

The biggest impact of a smaller US wheat crop & corn ending stocks will be on 2022/23’s total available supplies. Argentina & S Plains dryness along with Black Sea concerns about the food corridor collapsing provide corn & wheat international support. US harvest results remain important.

Still looking to add 20% sales to corn & soybeans in the $6.90-$7 & $14.25-45 ranges. Hold wheat sales at 45%.

More By This Author:

US Wheat Crop/Stocks Update
Pre-Sept 30 Corn & Bean Stocks: Be Alert For Stronger Corn Feeding & A Smaller US Bean Crop
September US Crop/S&D Reports - Lower Midwest Yields Pulled US Crop Outputs Down