USDA Report Review

By Todd Hultman
DTN Analyst

Most of the numbers in USDA’s December Supply and Demand report Wednesday looked familiar, with the agency making few changes from its November estimates. In fact, the U.S. ending stocks estimates for soybeans and wheat did not budge from November, staying at 465 million bushels and 911 million bushels respectively.

After Wednesday’s report, March corn was up 1/4 cent, January soybeans were unchanged, and March Chicago wheat finished up 8 1/4 cents.

For corn, USDA increased the ending stocks estimate from 1.760 billion bushels to 1.785 bb, a little more than was expected by analysts. It should have been no surprise, though, to see a 50-million-bushel reduction in the export estimate as export business has been especially slow for both corn and wheat. The cut was partially offset by a 25-million-bushel increase in the estimate of corn used for ethanol production — a quicker-than-expected response from USDA to EPA’s latest ethanol volume mandates.

Turning to USDA’s world estimates, the global ending corn stocks estimate was reduced slightly, from 211.91 million metric tons to 211.85 mmt, or 22% of annual use. Production estimates for Brazil and Argentina were both unchanged at 81.50 mmt and 25.60 mmt respectively as the first planting season is getting closer to the finish line. Even though Argentina’s new government is expected to scrap the export taxes on corn and wheat when the new president takes office on Thursday, USDA’s export estimate for Argentina was unchanged at 16.00 mmt as only 1.12 mmt of ending corn stocks are expected.

USDA’s estimate of global ending soybean stocks slipped from 82.86 to 82.58 mmt, not enough to rattle prices either way. Production estimates for Brazil and Argentina were unchanged at 100.00 mmt and 57.00 mmt respectively. The export estimate for Argentina was raised from 10.75 mmt to 11.25 mmt, just an 18-million-bushel difference that will have little price impact if USDA is correct about the new government’s intentions.

The estimate of global ending wheat stocks was increased from 227.30 mmt to 229.86 mmt, or 32% of annual use, a small bearish change that came mainly from a 1.6 mmt production increase for Canada. Surprisingly, no reduction was made to Australia’s 26.00 mmt crop estimate as dry weather has likely reduced this year’s yield. USDA’s estimate that world wheat production will total a new record-high 734.93 mmt is another bearish reminder of how much wheat is available and will likely keep prices under bearish pressure this winter.

Moving forward, markets will continue to focus on South America’s weather and pace of U.S. exports. The next WASDE report from USDA will be released on Jan. 12, 2016, and will include “final” U.S. production estimates for 2015. Winter wheat seedings and USDA’s quarterly grain stocks report will also be released on the same day.

Todd Hultman can be reached at

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