Play Turner’s Take Ag Marketing Podcast Episode 295
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The USDA released their January WASDE today along with the Quarterly Stocks Report and Winter Wheat Seedings. The report was fairly neutral. SRW wheat acres were higher than expected and winter wheat finished 13 cents lower. Global soybean sticks tightened more than expected and soybeans closed 13 cents higher. Corn was caught in the middle. Make sure you take a listen to this week’s Turner’s Take Podcast!
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JANUARY 2022 WASDE
The January WASDE was a non-event today. SRW wheat acres were higher than expected and global soybean ending stocks were lower than expected. There was nothing in this report that could cause a limit move or change a trend. South American soybean production was lowered almost 10 MMTs. This results in the a net draw on global ending stocks year-over-year instead of a build. Further losses in South America will tighten major global exporter stocks.
Corn was neutral with no surprises. Carryout is now 1.5 billion. We were surprised the USDA lowered corn exports. I personally thought they would stay the same or go higher due to production losses in S. America. Below is a summary of US old crop production and ending stocks, South American productions, and winter wheat seedings.
New Crop Supply and Demand Ideas
Below are my early ideas on 2022-2023 new crop corn and soybeans. I’m going to assume 91mm acres corn with a trendline yield of 180. For soybeans it is 89mm acres and a yield of 51.
At 91mm acres and 180 bpa, US supply just barely keeps up with demand. Prices stay elevated in the $5s with weather markets into the $6s. Some traders are arguing for 94mm acres corn. If that is the case then we have to add on 500mm bushels to ending stocks. That means 2 billion carryout on a record production, beating old yields by 3 bpa. That is probably the best bear case I can come up with. A bull case of 91mm acres and a 175 yield puts corn in the $7 to $8 range. It doesn’t take a lot to get corn going another dollar higher this spring/summer if acres are 91 or even 92mm.
At 89mm acres and a 51 bpa, US supply just barely keeps up with demand. 89mm acres is only 1mm shy of a record. A 53 yield puts ending stocks at 500. A 49 yield sends ending stocks to 200 or lower. A 2 bpa difference from trend could be the difference between $10 and $15 soybeans.
Hold on to your hats this summer, it could be a wild ride.
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