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Domestic corn, soybean usage to take the spotlight in the April WASDE report.

Jacqueline Holland, Grain market analyst

April 8, 2022

5 Min Read
corn leaves

After the excitement of last week’s Prospective Plantings report, I want readers to be prepared to know that Friday’s World Agricultural Supply and Demand Estimates report may not be as big of a market mover as last week’s reports from USDA.

Tomorrow’s reports will not feature the 2022 acreage estimates released by USDA’s National Agricultural Statistics Service last week. Those forecasts will be included in the May 2022 WASDE report, which will share the first look at global supply and demand estimates for the 2022/23 marketing year.

But that doesn’t necessarily mean you should sleep on this report, either. Here is a breakdown of the top issues that will potentially move markets in today’s reports. As always, our team will be providing live coverage as the data is released. Tune in to or follow us on social media (@FarmFutures) for the latest news and analysis after USDA releases the reports at 11 a.m. CDT.

South American production shakeups

South American 2021-22 Corn and Soybean production

Brazil’s state agricultural agency, CONAB, released updated production values yesterday that will test USDA’s numbers in tomorrow’s report. USDA is typically conservative in their South American crop estimates relative to CONAB, though this year’s drought has triggered USDA to trim over a billion bushels of soybeans from Brazil, Argentina and Paraguay’s production estimates since December 2021.

CONAB’s forecasts yesterday shook up the markets, forecasting higher 2021/22 corn production (4.55M bu.) in Brazil than soybeans (4.50M bu.). If those estimates are realized in tomorrow’s report, it will be the first time since 2012 that the Brazilian corn harvest was larger than its soybean counterpart.

A strong winter corn crop contributed to CONAB raising corn forecasts while slow soybean export paces justified further cuts to the soybean crop. CONAB upped its corn export forecasts as global pressure from Black Sea market closures entice export prospects for Brazilian corn supplies.

Markets are expecting USDA to boost Brazil’s corn harvest and add further cuts to its soybean crop. Additional cuts to both Argentina’s corn and soybean harvests are also widely anticipated by the market leading up to WASDE’s release.

Domestic usage adjustments

US 2021-22 Ending Stocks

For corn, all eyes will be on export and ethanol usage rates. The trade is expecting USDA to tack on an additional 20 million bushels of 2021/22 corn consumption. Following large daily flash sale purchases by China earlier this week, I would expect the larger share of those 20 million bushels to be devoted to the export category.

An additional 5.5 million bushels will be added to demand categories based on last week’s Quarterly Grain Stocks report. The report reduced December off-farm stocks by 5.5 million bushels, meaning that usage during the September-November reporting period was higher than expected.

Domestic soybean stocks are also expected to be trimmed 20 million bushels on higher usage rates. September through February 2022 soy crush rates are trending fractionally below (0.4%) year-ago rates, so I’m inclined to believe USDA is going to raise soy exports to obtain this value.

During the last eight weeks, soybean export loading paces to top buyer China have risen 121% over volumes from the same time last year. This is significant because the time period typically represents peak Brazilian exporting periods – and downtime for U.S. soybean exports.

NASS found an extra 2 million bushels of soybeans on off-farm stocks during the September – November reporting period. If USDA chooses to apply this revision to demand estimates, then it will likely be offset by any usage increases USDA forecasts for domestic soybean stocks.

NASS’s downward revision to September – November wheat stocks totaled a massive 12 million bushels. But trade estimates expect wheat stocks to increase slightly (3M bu.) tomorrow, so I think any bullish revisions for past domestic wheat usage will be offset by lower usage forecasts expected for the remainder of the 2021/22 wheat marketing year.

World stocks

040822 World 2021-22 Ending Stocks.JPG

Markets will be keeping a close eye on wheat trade flows in tomorrow’s report. Pre-report trade estimates suggest net movements won’t significantly change but there could be some price action depending on how USDA realigns trade flows for Russia, Ukraine, Africa and the Middle East.

A USDA attaché report released last week pointed to declining wheat import volumes for top global importer Egypt in the upcoming 2022/23 marketing year as prices soar and wheat availability remains limited. Any further signs of demand destruction in tomorrow’s report could add bearish pressure to the volatile wheat complex.

Global soybean stocks are likely to see the biggest reductions following further cuts to South American soybean crops. Any losses to the Argentine corn crop will likely be offset by additions to Brazilian corn production and should net out to relatively small adjustments for global stocks.

USDA attaché reports out over the past month suggest that Chinese import volumes for soybeans will increase in 2022/23, so that could open the door for some late season export premiums for U.S. soybean growers this summer.

USDA will not release its official estimates on the new marketing year until next month. But if these trends start to gain momentum in the coming weeks, the price effects could creep into current market and pricing dynamics.

USDA World production

About the Author(s)

Jacqueline Holland

Grain market analyst, Farm Futures

Holland grew up on a dairy farm in northern Illinois. She obtained a B.S. in Finance and Agribusiness from Illinois State University where she was the president of the ISU chapter of the National Agri-Marketing Association. Holland earned an M.S. in Agricultural Economics from Purdue University where her research focused on large farm decision-making and precision crop technology. Before joining Farm Progress, Holland worked in the food manufacturing industry as a financial and operational analyst at Pilgrim's and Leprino Foods. She brings strong knowledge of large agribusiness management to weekly, monthly and daily market reports. In her free time, Holland enjoys competing in triathlons as well as hiking and cooking with her husband, Chris. She resides in the Fort Collins, CO area.

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