June S&D Highlights
|Wheat||-4 (SRW); -3 (HRW); unc (MW)||-4; -4; -0.5||-3; +0.75; unch|
|2019 Final||2020 July USDA||2020 August Trade||2020 August Trade Range||2020 August USDA|
|Corn||13,663||15,000||15,177||14,815 - 15,401||15,278|
|Soybeans||3,557||4,135||4,260||4,150 - 4,399||4,425|
|All Wheat||1,920||1,824||1,833||1,814 - 1,856||1,838|
|All Winter||1,304||1,218||1,218||1,205 - 1,233||1,198|
|HRW||833||710||710||700 - 720||695|
|SRW||239||280||280||270 - 295||277|
|WW||232||227||228||220 - 239||226|
|July 19/20 USDA||August 19/20 Trade||August 19/20 USDA||July 20/21 USDA||August 20/21 Trade||August 20/21 USDA|
South America Production
|18/19 Crop||July 19/20||August 19/20 Trade||August 19/20 Range||August 19/20|
|Brazil||117.0||126.0||125.4||122.0 - 127.0||126.0|
World Ending Stocks (MMT)
|June 18/19||May 19/20||June 19/20||May 20/21||June 20/21||June 20/21|
August Supply-Demand Summary
Corn: USDA ideas on the U.S. corn yield of 181.8 bpa exceeded the trade average of 180.5 and with production of 15.278 bbu some 100 million higher than the trade and expected ending stocks of 2.756 bbu up 108 from LM (but short of the 2.824 trade average), the market started of a couple of cents lower but gained strength as the session continued. Feed/residual use were higher in line with the larger crop estimate and exports were increased by 75 million from LM to 2.225 bbu. No reference to China and corn in the USDA’s verbiage. There was a big boost in the milo yield of 9.1 bpa to 76.6 but the 44 million increase was largely absorbed with a 40 million increase in exports to 260. With the trade still trying to define yield/acreage loss in Iowa from the Monday’s windstorm, market would seem to be appropriately price for today, up 2+.
Soybeans: Well, the bean yield sure beat the odds (51.2 trade average; 50.0-53.0 range). Production at 4.425 bbu was a sizable 145 million more than the trade average (range: 4.150-4.399) with carry-out jumping 185 mbu from July to 610 million and 84 mbu more than the average guess. Greater exports (up 75 from LM) and crush (up 20) helped limited the build in ending stocks. The USDA boosted its estimates of Chinese imports by 3 MMT for 19/20 and by 2 for 20/21 but this was partially offset/negated by larger exports out of South America with a combined 5.0 MMT increase indicated for 19/20 and 2 MMT increase forecast of the 20/21 S Am crop. With only minor adjustments to the 19/20 S Am supply and China buying beans like there is no tomorrow, the hot issue right now would appear to be how the market meets SOND bean export demand should China’s import pace fail to slow.
Wheat: A mixed bag, with HRS production estimate greater than expected but HRW output below the average trade guess. U.S. HRS crop increased 28 mbu from last month (5.5%) to 530 mbu, while HRW declined 15 mbu (2.1%) to 695 mbu. Changes in world crop estimates were highlighted by 4.0 MMT reduction in EU; Argentina, -0.5 MMT; Russia, +1.5 MMT; and Ukraine, +0.5. Net was the USDA increased all wheat exports 25 mbu (including +20 for HRW), although bias is crop size in Australia has the potential to increase substantially, which would curtail U.S. exports in the first half of 2021. Choppy, as the market continues to monitor world production trends.
Old Crop – Non Event:
- Ethanol grind unchanged at 4.850 bbu;
- Exports increased by 20 to 1.795 bbu;
- Ending stocks down 20 to 2.228 billion;
- The USDA’s average producer price forecast continues at $3.60.
- Harvested area steady at 84.0 million;
- Yield UP3 bpa to 181.8;
- Beginning stocks 20 lower as above;
- Production increased 278 mbu from last month to 15.278;
- Feed/Residual increased 75 (27% of the increase in production) to 5.925 bbu;
- FSI use unchanged at 6.625 bbu; ethanol grind continues at 5.2 bbu;
- Exports increased by 75 to 2.225 bbu, reflecting greater EU needs;
- Ending stocks up 108 mbu from LM to 2.756 for an 18.6% stx/use ratio (18.1% LM; 16.3% LY);
- Average producer price estimate plummets $.25 to $3.10.
- No change on the demand side;
- Ending stocks remain at 30 mbu;
- Average producer price continues at $3.25.
- A BIG August bump in the milo yield, 9.1 bpa to 76.6;
- Production rises 44 million to 371;
- Feed/residual unchanged at 70;
- FSI use increased unchanged from LM at 45;
- Exports increased by 40 to 260 mbu;
- Ending stocks increase 4 to 26;
- Price impact: down $.25 to $3.10.
- Crush increased by 5 to 2.160 billion—both domestic and export meal demand increased;
- Exports unchanged at 1.65 billion;
- Seed/residual use continues at a negative 46 mbu;
- C/O falls 5 to 615 mbu;
- Average producer price steady at $8.55/bu.
- Higher crush raises production 115 million pounds;
- Imports lowered by 25;
- Domestic use revised 50 million pounds higher—200 for biodiesel with food use 150 lower;
- Exports held steady at 2.850 billion;
- Ending stocks rise 40 million pounds to 2.06 billion;
- Exports increased by 200 K ST to 13.65 MST:
- Domestic use increased 100 K to 37.9 MST;
- Ending SBM stocks steady at 375 K.
- Yield forecast soars 3.5 bpa to 53.3 bpa, 5.9 higher than LY;
- Harvested area steady at 83.0;
- Production increased 290 million, to 4.425 bbu (3.55 LY);
- Crush 20 higher at 2.180 bbu;
- Exports increased 75 million to 2.125 bbu
- Ending stocks jump 185 mbu from LM to 610 mbu;
- 7% stx/use, versus 9.7% LM and 15.9% for 19/20
- Average farm price forecast leaks $.15 lower to $8.35.
- Beginning stocks up 40 from above to 2.060 billion pounds;
- Imports 50 lower at 350 mil lbs;
- bio diesel use unchanged at 8 billion pounds;
- No change in exports from LM, still at 1.5 bil lbs;
- Net is a 20 million pound increase in ending stocks to 2.075 billion pounds;
- Oil price increased $.01 to $.3000 per pound;
- Domestic meal use estimate increased 200 K ST to 38.3 MST (37.9 LY);
- Exports increased 250 K to 13.5 MST 13.650 LY);
- Expected SBM price drops $10 to $290.
Spring Wheat Production—20/21
- HRS crop forecast at 530 mbu, which was up 28 million from last month. However, the trade was only expecting an increase of 11 mbu. There were no changes made to harvested acreage in this report. The next update on harvested acreage and production will be included in the USDA Small Grain Summary, which is due on Sep. 30. Looking at individual states, yield increases relative to the July report were noted in North Dakota (+3.0 bpa); South Dakota (+4.0); Montana (+2.0 bpa); Minnesota (+1.0); and Washington (+1.0). Idaho saw a reduction of 2.0 bpa vs. last month.
Winter Wheat Production—20/21
- Update pegs winter wheat production at 1.198 bbu, which is well below the avg. trade guess of 1.218 and below the trade range (1.205-1.233);
- Harvested acreage was unchanged from last month at 23.4 mil. However, the national avg. yield est. declined 0.9 bushel to 51.1 bpa (vs. 53.6 in 2019);
- HRW forecast at 0.695 bbu, 15 million bushels below the July estimate of 0.710 bbu and 15 mil below the avg. guess. KS yield was reduced 2.0 bpa to 46.0. SRW output is pegged at 0.277 bbu, down 3 mbu from July and below the avg. guess of 0.280. White wheat production pegged at 0.226 bbu vs. the avg. trade guess of 0.228 and below last month’s 0.227.
U.S. All Wheat Supply/Demand—20/21
- The increase in all wheat production from 1.824 bbu to 1.838 bbu and primarily reflects larger HRS and Durum output. Total supply of 3.011 bbu is down 3.0 vs. last year;
- Usage—Food use was lowered 4 mbu vs. last month to 960, with no change to seed; feed/residual was unchanged at 90 mbu. Exports were increased 25 million to 975 mbu “on lower production for several key competitors, most notably the EU”, according to the USDA. Total use of 2.086 bbu is up 1.2% vs. 19/20;
- Ending stocks of all wheat are forecast at 0.925 bbu, which was below the average trade guess of 0.948; however, average farm price forecast is pegged at $4.50, which is $0.10 lower versus July. The ending stocks-to-use ratio is forecast at 44.3% vs. 45.6% last month and 50.7% in 19/20.
U.S. All Wheat Supply/Demand—19/20
- Seed use was increased by 1 mbu to 61 mbu;
- Feed/residual was lowered 1 million to 73 mbu.
- Global beginning coarse grain stx lowered 740 K MT from LM to 341;
- Foreign coarse grain production down 2.0 MMT from LM to 1.062 MMT (1.046 LY);
- Foreign corn production up 760 K versus July at 782.2 (767 LY);
- Foreign corn use revised up 2.75 MMT from LM to 846 (820 LY);
- 20/21 foreign wheat feeding reduced 1.2 MMT to 131 (137 LY); EU cut 1 MM TM;
- Competitor production:
- 19/20: No change in South Am numbers;
- 20/21: Argentina steady at 50.0; Brazil steady at 107; RSA, unchanged at 15.3; Ukraine corn raised ½ MMT to MMT to a record 39.5 MMT (35.9 LY);
- Competitor Exports:
- 19/20—reduced 1 MMT to 108.7 (Ukraine);
- 20/21—edged up 300 K to 128.1 MMT;
- Old crop foreign imports reduced 600 K to 167.4;
- 20/21 imports raised 2.1 MMT to 171.9;
- China corn crop continues at 260 (261 LY); imports remain at 7.0 for both 19/20 and 20/21;
- Global ending corn stocks increase 2.4 MMT to 317.5 (311 LY-19/20).
- Hurrah–China imports for 19/20 raised 2 MMT to 98.0; 20/21 seen 3 MMT greater at 99.0;
- No change in the 20/2119 Arg/Brazil/Para crops; USDA did lower 19/20 Arg production by 300 K to 49,7 MMT;
- China crush raised 2 and 3 MMT for 19/20 and 20/21;
- Non-PRC SB imports up 1.5 MMT to 63.5, but 750 K lower than 19/20 estimate;
- Note: USDA increased 19/20 Arg SB exports ½ MMT to 9.5 and Brazil’s by 4.5 MMT to 93.5;
- S AM 20/21 SB exports also increased with Argentina up 1.0 to 7.5 and Brazil, 1 MMT higher at 84.0;
- Ending global bean stocks up slightly from LM (280 K to 95.4 (95.1). Sizable reduction in ending 19/20 beans stocks of 3.8 MMT to 95.85.
- Production for 20/21 decreased 3.3 MMT to 766.0 MMT (still a record);
- Carry-out for 20/21 increases 2.0 MMT vs. last month and is historically high at 316.8 MMT;
- World ending stocks-to-use ratio for 20/21 now at 42.2% vs. 41.9% in July
- Russia production forecast up 1.5 MMT from last month, and export forecast increased 1.5 MMT to 37.5 MMT (34.2 MMT last year). Production in Ukraine was increased 0.5 MMT to 27.0, with exports boosted 0.5 MMT to 18.0 MMT (versus 21.1 last year);
- EU-27 crop lowered 4.0 MMT to 135.5 while exports were reduced by 1.5 MMT to 25.5 (versus 38.0 MMT last year;
- Australia crop unchanged at 26.0 MMT and exports steady at 17.5 (versus 9.5 last year); however, recent timely rain suggests an increase in crop size is likely;
- Canada production reduced steady at 34.0 and exports were unchanged at 24.5 MMT (versus 23.9 last year);
- Argentina production declines 0.5 MMT to 20.5 MMT (versus 19.8 last year) and exports were also lowered 0.5 MMT to 14.0 (versus 13.5 a year ago).
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