USDA Reports Preview
It's Too Cold for USDA to Make Major Changes in Estimates
As much of the U.S. shudders from the chill of a wintery arctic blast, USDA's December reports aren't expected to warm things up much.
USDA will release its latest Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports at 11 a.m. CST Friday.
SOYBEANS
Changing things up a bit, let's start with soybeans this month. The average pre-report estimate for soybean ending stocks came in at 472 million bushels, down slightly from USDA's November projection of 480 mb. Three out of the last four years have seen a November-to-December decrease, though last year USDA held steady at 465 mb. Given the continued downtrend in old-crop futures spreads, it would not be surprising to see USDA actually bump up its ending stocks figure. And, if so, the increase would likely come from a slightly higher production number or a possible small bump in imports. As for global ending stocks, the average pre-report estimate came in at 81.2 million metric tons, also down slightly from the November WASDE figure of 81.5 mmt. All eyes will be on the lookout for a possible increase in South American production, most notably Brazil from last month's 102 mmt.
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CORN
The flip-side of the expected small decreases in soybean ending stocks, both domestic and global, are slight increases expected to be seen in corn. The average pre-report domestic number came in at 2.416 billion bushels versus last month's 2.403 bb, though again futures spreads would seem to disagree. The last month saw the carry in the old-crop forward curve weaken slightly, indicating a relatively stable supply-and-demand situation. While USDA isn't likely to up its export demand projection from 2.225 bb, the extraordinary pace through the early part of 2016-2017 could prove tempting. As for global ending stocks, the average pre-report estimate showed a 1 mmt increase from November to 219.2 mmt. If realized, the catalyst could be another increase in the 12 countries of the former Soviet Union (FSU-12) production estimate. The November WASDE report saw this figure climb 1.5 mmt to a total of 45.56 mmt.
WHEAT
The world isn't expected to run out of wheat any time soon. That's about as close to a guarantee as one will get in commodities. Global ending stocks saw an average estimate of 250.4 mmt, up from the November WASDE projection of 249.2 mmt. If realized, it could come from an increase in either Australian or FSU-12 production. And if ending stocks edge up on increased supplies while global demand stays unchanged, ending stocks-to-use could be bumped from November's 33.8% to 34%. Domestic ending stocks are expected to decrease 5 mb to 1.138 bb. If so, it could be due to a small, small increase in export demand.
| U.S. ENDING STOCKS (million bushels) 2016-2017 | ||||||
| Dec | Avg | High | Low | Nov | 2015-16 | |
| Corn | 2,416 | 2,584 | 2,369 | 2,403 | 1,738 | |
| Soybeans | 472 | 514 | 439 | 480 | 197 | |
| Grain Sorghum | 41 | 45 | 37 | 40 | 37 | |
| Wheat | 1,138 | 1,175 | 1,030 | 1,143 | 976 | |
| WORLD ENDING STOCKS (million metric tons) 2016-2017 | ||||||
| Dec | Avg | High | Low | Nov | 2015-16 | |
| Corn | 219.2 | 224.8 | 217.1 | 218.2 | 209.4 | |
| Soybeans | 81.2 | 83.0 | 78.1 | 81.5 | 77.1 | |
| Wheat | 250.4 | 252.6 | 249.0 | 249.2 | 241.0 | |
| WORLD PRODUCTION (million metric tons) | ||||||
| 2016-17 | 2015-16 | |||||
| Dec | Nov | Dec | Nov | |||
| Australian wheat | 28.3 | 24.5 | ||||
| FSU - 12 wheat | 131.4 | 118.2 | ||||
| Brazil corn | 83.5 | 67.0 | ||||
| FSU - 12 corn | 45.6 | 39.9 | ||||
| Argentina soybeans | 57.0 | 56.8 | ||||
| Brazil soybeans | 102.0 | 96.5 | ||||
Darin Newsom can be reached at darin.newsom@dtn.com
Follow him on Twitter @DarinNewsom
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