The September report on global agricultural supply and demand estimates will likely be the last time the USDA updates its production and use estimates before most corn and soybean growers in the states States are only heading to the fields for harvest and are starting to run sales and deliveries for their 2022/23. marketing plans.
So while this month’s report is unlikely to contain significant supply adjustments, it will still provide important fundamental information that will influence spot market dynamics over the coming weeks and are essential for farmers at this time of year.
Here’s a snapshot of the market activity I’ll be watching in Monday’s reports. As always, follow us at FarmFutures.com and @FarmFutures for the latest highlights and analysis from the report. The USDA releases the WASDE and Crop Production reports at 11:00 a.m. CDT on Monday, September 12. Follow us for all the best information!
Square footage updates
On Tuesday, the USDA announced that the National Agricultural Statistics Service will review and possibly update acreage estimates for 2022 based on data from the Agricultural Services Agency and the Risk Management Agency.
Translation: NASS will update corn and soybean acreage in next week’s WASDE and crop production reports based on Prevent Plant acreage and crop insurance information reported to the FSA and the RMA earlier this year.
This is generally not standard practice – NASS usually waits for the FSA and RMA to finalize their data and issue revisions in the October Crop Production and WASDE reports. However, a NASS statement released on Tuesday said “the data is complete enough this year to consider adjustments in September.”
Analysts have rushed over the past two days to revise their pre-report 2022 U.S. production estimates to account for potential acreage changes, with all trade forecasts just released last night, with just two business days to go. than the USDA publishes the September 2022 WASDE and agricultural production report.
So far, it looks like the market is expecting a slight decline in corn and soybean acreage in Monday’s report, with larger corn acreage losses based on the latest Prevent Plant findings reported by the USDA Farm Service Agency a few weeks ago. At 3.1 million acres of acres filed to prevent corn planting, unplanted acreage was up four times from a year ago. For soybeans, avoid that plant acreage has doubled from a year ago to just under one million acres (987,231 acres).
USDA-NASS did not review crop yields and production in August, so there are unlikely to be any significant changes in yields in Monday’s report. NASS will likely be surveying farmers again to collect this data this month, so expect yield updates in the October 2022 Crop Production Reports and WASDE.
Even with the 2021/22 marketing year for corn and soybeans on the books, there will likely be some final revisions to usage categories over the next two WASDE reports due to normal delays in the data collection process. data the USDA knows along the way. creation of these forecasts.
Monday’s report will likely see corn and soybean stocks rise, based on current trade estimates. Those reductions could come from stagnating corn ethanol production in August as well as slowing corn exports this summer as the dollar hit new 20-year highs.
For soybeans, it seems very likely that slow export paces over the past two months will likely lead to downward revisions to utilization (final supply up) in Monday’s report. Crush rates year-to-date through July 2022 remained 3% higher than the same period last year, with signs of production accelerating in July as rising non-seasonal exports slowed.
We’re just two weeks into the 2022/23 marketing year for corn and soybeans, so it may still be too early to tell what kind of usage revisions the USDA might have in store in the report. of Monday. Trade appeared hesitant to make any significant changes to soybean stocks, although it expects cuts in corn stocks.
This is a neutral to bearish outlook for soybean prices on Monday and a bullish outlook for corn. Smaller corn acreage could play a role in that outlook, but with struggling yields in the Northern Hemisphere this summer, it seems likely the USDA will raise its export forecast in Monday’s report.
Trade expects the USDA to increase wheat stocks by an average of 8 million bushels on Monday. The bearish outlook means the USDA is likely to reduce wheat stocks. Stronger than expected milling data released in early August suggests reductions in wheat consumption will likely come from livestock or export.
According to Monday’s WASDE report, northern hemisphere crop shortfalls due to excessive drought this summer are expected to tighten corn supplies. This is a bullish omen for corn prices, although any price action will likely hinge on USDA revisions to US supplies and usage in 2022/23.
Even with expected production losses in Argentina due to recent frost damage and drought, wheat supplies are expected to rise in Monday’s WASDE reports, suggesting lower prices may be in order for the wheat market.
The wheat crop is on a downward spiral in the Northern Hemisphere, so much of Monday’s movement will likely occur in the import and export section of the balance sheet. Top exporter Russia struggles to keep pace with exports from the European Union and Ukraine as buyer remains wary of economic sanctions that continue to keep transport, insurance and financing costs down bred for Russian wheat shipments.
For soybeans, all eyes will be on USDA’s adjustments to China’s soybean imports for the 2022/23 season. This is where bears might start infiltrating the soy complex, so it will be worth keeping an eye out for.
USDA’s Foreign Agricultural Service Attaché in Beijing released an updated outlook yesterday, noting that slowing global economic forces are likely to limit growth prospects for China’s soybean industry this year to come. China’s livestock production forecast is also expected to be impacted by tight producer margins amid responsive consumer prices and stiff production competition.
“China’s slowing economy and COVID-related restrictions continue to weaken demand for oilseeds for feed and food,” the report said. “Low demand for vegetable oil in the foodservice sector and soybean meal in the pig and poultry sectors,” the report also noted.
Additionally, a devastating heat wave in south-central China this summer will likely eat into eventual yields, even though most of the country’s crop in the northern part of the country has been spared heat destruction.
The USDA post now expects China to harvest 665 million bushels of soybeans this fall, down from the USDA’s current estimate of 676 million bushels. The attaché’s report projects that China’s soybean imports in 2022/23 will be 2% lower (55 million bushels) at 3.5 billion bushels.
The oilseed market will need further bulls to maintain a floor below prices. India, the world’s largest importer of edible oils, could offset some of the drop in Chinese demand, as a recent report by an FAS attaché estimates that imports are likely to accelerate in the coming months after delays. monsoon.