Glacier FarmMedia – Ahead of the monthly report from the United States Department of Agriculture on Jan. 12, Allendale Inc. president Steve Georgy said he’s not expecting any major surprises for U.S. corn, soybeans or wheat at this point in the 2023/24 marketing year.
The USDA is scheduled to publish its latest edition of the World Agriculture Supply and Demand Estimates on Jan. 12 at 11 am Central.
“I don’t think there’s anything the USDA is going to surprise us with, either on the domestic side or the global numbers,” Georgy stated.
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One thing he said to watch for is the carryout for U.S. corn, specifically as to which side of two billion bushels the data will be on.
“Anything over that is going to be looked at as kind of negative,” Georgy said.
The average trade guess placed U.S. corn ending stocks for 2023/24 at 2.11 billion bushels, a pinch lower than the 2.13 billion the USDA said in its December report.
The markets projected the USDA to peg this year’s Brazil corn production at 125.3 million tonnes, down from December’s 129 million. However, CONAB cut its forecast for the same crop from 118.5 million tonnes last month to now 117.6 million.
Should there be something that might generate a surprise, Georgy said to watch U.S. corn’s feed and residual numbers.
“There’s more cattle in the feedlots over the last quarter or so. And you got heavier cattle out there,” he stated.
“If the USDA is going to knock something, do they change that feed and residual category, where we used more corn than what we thought. That could be a pretty big swing,” Georgy continued, noting such would lead to a change in the tone for corn for the short term.
As for soybeans, Georgy said he expects 2023/24 U.S. ending stocks to be more than 200 million bushels. Market expectations for the January WASDE put the soybean carryout at 243 million bushels, down slightly from the department’s December call of 245 million.
But it’s Brazil’s soybean production to watch for. The trade put the USDA’s estimate for Brazil’s output at 156.3 million tonnes, dropping from 161 million in the December report. CONAB moved in the same direction, cutting last month’s forecast of 160.2 million tonnes down to 155.3 million.
With those numbers, Georgy said soybeans have become a weather market, driven by what’s happening in South America and in the U.S.
While Georgy said Chicago Board of Trade soybeans are presently oversold and due for a bounce, he stressed in the longer term the picture for them is not as bright.
“The global supply is bigger than what we think,” he commented.
When it came to wheat, Georgy said something could soon happen.
“The big thing for wheat, seasonally we continue to drag lower right now to the end of the month, but the wheat market wants to get excited,” he stated, pointing to the demand side.
“If we start seeing more demand or if we see the USDA start to slash a little of the carryout, that could shake the short positions,” Georgy explained.
Regardless of the numbers the USDA will produce on Jan. 12, Georgy said there will very likely be some kind of movement in the markets – as there often is with the department’s January WASDE.
“It’s because of the unknown. If everybody is looking one way to see what’s going on to change, somewhere else that is going to make people look,” he said.
Along with its monthly estimates, the USDA is scheduled to release its winter wheat seedings report plus its quarterly stocks report. Estimates for winter wheat place acres planted at 35.8 million acres versus the 36.7 million seeded in 2022/23, according to private estimates.
U.S. soybean stocks as of Dec. 1 are expected to be slightly below three billion bushels, down 1.5 per cent from the previous December, according to media reports. Corn stocks were projected to fall further, down 11 per cent from a year ago at 12 billion bushels. Wheat stocks were projected to be nearly 1.4 billion bushels, for a six per cent gain from December 2022.
— Glen Hallick reports for MarketsFarm from Winnipeg.
