MarketsFarm — Updated estimates in the U.S. Department of Agriculture’s monthly supply/demand report, released Wednesday, saw larger than expected increases to soybean and corn yield estimates in the country.
However, that data did little to move the markets, with the commodities likely stuck in a sideways range for the time being, according to a trader.
“I was a little surprised that both yields and production were up for corn and (soy)beans,” said Terry Reilly of Futures International in Chicago. He said anecdotal reports about later-harvested fields had hinted that production of both crops could have been revised lower, “but somehow the USDA found higher yields.”
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USDA upped its soybean yield projection for the 2022-23 crop by 0.4 bushels per acre, taking it to 50.2 bu./ac. Projected U.S. soybean ending stocks for 2022-23 were pegged at 220 million bushels, from 200 million in the October report.
Corn yields were also raised by 0.4 bu./ac., now at 172.3 bu./ac., surpassing trade estimates. U.S. corn ending stocks were increased by 10 million bushels, to 1.182 billion bushels.
The larger crops saw crush numbers revised higher for soybeans and feed usage higher for corn.
Reilly described the wheat numbers as “benign,” with only small adjustments to world and U.S. stocks projections.
Changes to South American crop estimates were also of interest, with USDA dropping its forecast for corn production in Argentina by 1.5 million tonnes, while leaving the Brazilian forecast unchanged. Corn crops for both countries were unchanged from the October report, which was somewhat unexpected, according to Reilly, as there had been talk of farmers switching some area from corn to soybeans.
Wheat production in Argentina was lowered to 15.5 million tonnes, but Reilly said the actual crop was likely smaller still.
From a pricing standpoint, “for now I’m looking for prices to hold in a sideways trading range for all of these markets,” said Reilly. However, he added, uncertainty over grain movement out of Ukraine remained a cloud overhanging the markets, with any developments likely to lead to some price swings.
— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.
