Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

WASDE Update: Mixed Bag For Grains

By ING Economic and Financial AnalysisCommoditiesNov 11, 2021 05:55AM ET
www.investing.com/analysis/wasde-update-mixed-bag-for-grains-200608061
WASDE Update: Mixed Bag For Grains
By ING Economic and Financial Analysis   |  Nov 11, 2021 05:55AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

The USDA has revised higher corn inventory estimates on the back of higher production in the US and elsewhere. Global stock estimates for soybeans have been revised down on stronger demand; although soft imports from China are a concern. The wheat balance continues to tighten due to healthy demand and soft production

Favorable weather helps corn crop

The USDA has increased its estimates for US corn production by 43m bushels to 15.06bn bushels for 2021/22 on account of better yields. This was slightly above the 15.05bn bushels the market was expecting. US domestic demand for corn also increased by around 50m bushels to 12.33bn bushels, as stronger ethanol demand is likely to help corn consumption. The net impact on corn stocks was only marginal, with ending stocks revised down from 1,500m bushels to 1,493m bushels. This is above the roughly 1,484m bushels the market was expecting.

Globally, the USDA has increased global production estimates by 6.4mt on account of better production in the EU, Argentina and the US. Production estimates for the EU and Argentina were increased by around 1.55mt and 1.5mt respectively on better yields and higher acreage due to late-planted corn.

The USDA also increased global corn demand estimates by 5.6mt, with major increases coming from the EU (+1.2mt) and the US (+1.3mt). Global corn inventory estimates at the end of 2021/22 were raised from 301.7mt to 304.4mt, largely on account of an upward revision in beginning stocks (+1.9mt) and somewhat larger revisions to production estimates. The market was expecting a reading of closer to 300mt.

Overall, with larger than expected ending stocks for both the US and the global balance, the report was moderately bearish for corn.

Corn supply/demand balance

Corn Supply/Demand Balance
Corn Supply/Demand Balance

US soybean inventory increase less than expected

For soybeans, the major change from the USDA was in export estimates due to soft demand from China. The agency revised down its expectations for US soybean exports by 40m bushels to 2.05b bushels for 2021/22 (down around 10% YoY). Domestic demand estimates were largely left unchanged at around 2.31b bushels.

On the supply side, the USDA lowered domestic soybean production estimates by around 23m bushels for the year due to weaker yields. On balance, US soybean stocks at the end of 2021/22 were revised up, by 20m bushels to 340m bushels. This was still below the roughly 362m bushels the market was expecting.

The global soybean balance saw revisions from Argentina, where production estimates were revised down from 51mt to 49.5mt due to lower acreage. Export estimates from Argentina were also reduced by around 1mt; although this was offset by higher shipments from Brazil.

China’s soybean import estimates were revised down by around 1mt to 100mt as softer crushing margins and subdued demand for animal feed could weigh on Chinese soybean consumption. Global soybean inventories at the end of 2021/22 was revised down by around 0.8mt to 103.8mt; the market was expecting inventory estimates to be revised up by around 1mt to 105.6mt.

The report was moderately bullish for soybeans, with inventory numbers coming in below market expectations.

Soybeans supply/demand balance

Soybeans Supply/Demand Balance
Soybeans Supply/Demand Balance

Wheat balance tightens further

The USDA left the US domestic wheat balance largely unchanged. Ending stocks were revised marginally higher from 580m bushels to 583m bushels. USDA’s numbers were largely in-line with market expectations of around 581m bushels. Both production and demand estimates were unchanged at 1.65b bushels and 1.16b bushels respectively. Import and export estimates were revised down by 10m bushels and 15m bushels respectively.

The global balance sheet continues to tighten for 2021/22. Ending stocks were revised down by another 1.4mt to 275.8mt. The market was expecting an ending stocks number of around 276.5mt. Global demand estimates were revised higher by around 0.4mt with increments coming from Russia, Iran and Turkey. On the other hand, supply estimates were downgraded by around 0.6mt, mainly due to lower supplies from the EU (-1mt), the UK (-0.7mt) and Uzbekistan. However, Russia’s production estimates were increased by around 2mt on the back of higher yields.

Once again, the USDA’s monthly WASDE report has proved supportive for wheat prices.

Wheat supply/demand balance

Wheat Supply/Demand Balance
Wheat Supply/Demand Balance

Disclaimer: This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Original Post

WASDE Update: Mixed Bag For Grains
 

Related Articles

Anna Coulling
Gold Still Struggling To Break Free By Anna Coulling - Jan 18, 2022 3

For gold bugs, it’s a question of patience and more patience as the precious metal continues to remain rangebound at the same level as the test of resistance, around the...

WASDE Update: Mixed Bag For Grains

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email