USDA had production about 27 million bushels larger, 5 million bushels of additional beginning stock, and it gives us ending stocks 660 instead of 627.
Supply & Demand
U.S. Soybean S&D
USDA acres planted at 88.325, acres harvested at 87.511, and leva production at 4.507 down a 143 million bushels from the June report.
Carryout went from 280 to 159.
U.S. Corn S&D
USDA adjusted planted acres to 89.921, adjusted harvested acres to 81.940. That’s up about 240 thousand from the June crop report.
This leaves production at 14.503 billion, up 43 million bushels from the June crop report.
Ending Stocks of 1459.
Corn, Soybeans, Wheat Supply & Demand
Wheat Supply & Demand
Beginning with acreage at 47.351 released in yesterday’s perspective planning report, harvest % of 82.3% which may end up being high if we have more abandonment in the US western plains and a yield of 49.1.
That 49.1 per acre yield is below what we saw in 2019 and 2020 but above last year. Keep in mind last year we had dramatic losses due to drought in the Dakotas and Pacific Northwest.
We do believe that this yield is somewhat optimistic and its likely this number could come down, but for today we will use 49.1 with an idea that may slip lower.
We are projecting Carryin at 628, that’s below USDA 653 due to the smaller than expected quarterly grain stock.
Turning to demand numbers, we are going to use food demand up just fractionally next year, feed demand down a little bit due to tight stocks and high prices, but exports likely going to rebound.
Similar to what we saw in the previous 3 years prior to this year’s very disappointing export.
Due to the problems in Russia and Ukraine and tight stocks globally we do anticipate that US exports could increase next year. That would bring ending stocks down to 585, tighter than this year and in fact the tightest we’ve seen going back to the 2013-2014 crop year.
What’s worth noting is that stocks of corn, soybeans, and wheat are expected to be tighter than what they were the previous couple of years.
Soybean Supply & Demand
USDA’s acreage estimate for soybeans was 90.955 million acres, a normal harvest % of about 99.1% giving the harvested acres a 90.128.
We are using a trend line yield of 51.5 bushels per acre which would give us a crop of 4.642 billion bushels.
Our stocks estimate at 215 is below this year, even though our quarterly grain stock came in above the trade expectation, we believe that export demand and likely crush demand as well could be above what USDA is currently projecting. That will more than offset the larger stock that was projected yesterday giving us ending stocks this year at 215 and that would carry over into the beginning stock for next year.
Turning to our demand numbers, we believe that crush could be up next year and exports due to massive crop losses in South America.
Bottom line is that ending stocks at 197, stock use of 4.2% are tighter than this year and tighter than last year and in fact getting back towards the 2013-2014 timeframe when stocks were extremely tight.
Corn Supply & Demand
With USDA estimates for the current crop year 2021-2022, which goes through August 31 of this year for corn and bean. On the right side is the trad ides, what most of the trade is likely thinking for new crop ending stock including the crop that will be planted this spring.
Corn acres at 89.49 million acres with a normal amount of abandonment and silage, that would give us 89.1 million acres harvested and a trend line yield of 181 bushels per acres this year.
We are projecting beginning stocks next year at 1.2 billion, that is below this years ending stock, we do believe that a combination of lower than expected quarterly grain stocks combined with larger exports than USDA is currently projecting will result in the 1.44 shrinking to 1.2.
Therefore that is what we are using for beginning stock next year.
When we look at our largest demand category, we believe that feed and residual will likely be similar to what we are looking at this year. Ethanol we are looking at something similar, granted these numbers could change, but at this time we believe both ethanol and exports could be similar in the next crop year.
We do believe because of losses in South America combined with challenges due to the Russia/Ukraine war, that our exports will be larger next year at 2.7 and that’s similar to what we saw a year ago at 2.75.
When we combine all the supply items with all the demand items it results in ending stocks at 909 million bushels, that would be a 6% stock use ratio, that’s tighter than what is currently being projected for this year and tighter than where we ended up last year.
Therefore, current prices are higher than they were a year ago at this time and its due to the markets idea that next years ending stock will be even tighter than the past couple of years.