USDA Sees Higher Production

Outlook Forecasts Larger Corn, Soybean Crops for 2021

USDA's initial outlook for the 2021-22 corn and soybean crops released Friday forecasts higher acreage, higher yields and higher overall production. USDA cited strong demand for both crops would continue both domestically and through exports. (USDA image)

OMAHA (DTN) -- USDA sees higher corn and soybean production with this year's planted acres and yield forecast to rise in USDA's initial Grains and Oilseeds Outlook released Friday.

Corn production is projected at 15.2 billion bushels (bb) for the 2021-22 crop and soybean production is projected at 4.5 bb. Higher demand forecasts for both crops will keep ending stocks relatively low, especially for soybeans.

USDA released the Grains and Oilseeds Outlook as part of the USDA Agricultural Outlook Forum, which continues Friday.

CORN

USDA projected 2021-22 crop year to lead to larger crop production, greater domestic use and exports, and slightly higher ending stocks.

The 2021-22 corn planting is projected 92 million acres (ma). With a yield projected at 179.5 bushels per acre (bpa), USDA forecasts the corn crop production at 15.2 bb. USDA cites the higher yield as based on weather-adjusted trend, assuming norming planting progress and summer growing-season weather.

All of that compares to the 2020-21 crop at 90.8 ma planted, a yield of 172 bpa and production at 14.18 bb.

Total corn use for the 2021-22 crop is also forecast to rise 3% as well on higher demand in both domestic use and continued strength in exports. Feed, seed and industrial use is projected up 4% to 6.6 bb. Corn used for ethanol also is expected to increase 5% based on expectations of higher motor gasoline consumption over the next year following the slowdown due to COVID-19. Feed and residual use for corn in 2021-22 will increase 200 million bushels (mb) to 5.9 bb.

Corn exports are expected to increase 50 mb to 2.7 bb, "reflecting expectations of global trade growth and continued robust demand from China."

Ending stocks for the 2021-22 corn crop is pegged at 1.6 bb, up 50 mb from the forecast now set for the 2020-21 crop. The stocks-to-use ratio for corn will remain at about 10.3%.

The average corn price per bushel will drop in 2021-22 by 10 cents a bushel (bu) to $4.20 a bu.

SOYBEANS

USDA expects farmers to plant 90 ma of soybeans in 2021, up 6.9 ma from last year. USDA said the gain is encouraged by "new-crop soybean futures prices relative to corn, supported by strong Chinese demand and the tightest stocks-to-use ratio since 2013-14."

Soybean production is pegged at 4.5 bb, up 9% above 2020-21 production with yield projected at 50.8 bpa.

That compared with production for the 2020-21 crop at 4.14 bb and a yield of 50.2 bpa.

The agency sees ending stocks at 145 mb, up 25 mb from its current estimate of 2020-21 ending stocks. Ending stocks to use, at 3.2%, will remain historically low. It's calling for lower exports and higher crush.

"Soybean crush margins remain relatively strong with soybean and soybean product prices near 2020-21 levels. Soybean meal prices are forecast at $390 per short ton. Domestic use of soybean oil is projected up 2% for 2021-22 on expected expansion in renewable diesel capacity and gains in edible oil," USDA said.

Soybean exports are pegged at 2.2 bb, 50 mb lower than in 2020-21, citing limited exportable supplies that will curtail U.S. market share.

The season-average farm price is projected at $11.25 per bu, "up slightly from 2020-21 as forward pricing opportunities for 2021-22 are expected to be higher than a year ago."

WHEAT

USDA expects the 2021-22 crop year for wheat to show reduced supplies, slightly higher total use and declining ending stocks. The total production forecast, at 1.827 bb, is almost unchanged from 2020-21 with total acreage forecast at 45 ma and a national average yield of 49.1 bpa.

The NASS Winter Wheat and Canola Seedings report estimated winter wheat acreage at 32 million, up 5% from last year and the first increase since the 2013-14 season. Spring and durum wheat plantings, however, are expected to decline due to high corn and soybean prices winning over acreage in the Northern Plains.

Lower beginning stocks, combined with a virtually unchanged crop size, will result in a 6% decline in supplies to 2.793 bb, the lowest in seven years. Ending stocks for 2021-22 are expected to decline to 698 mb, 17% below the current year and the lowest carryout since 2013-14.

Total use, at 2.095 bb, is slightly lower than last year, but above the five-year average. Domestic use is forecast to be higher on increased feed and residual use "as the narrowing wheat-corn price spread is expected to increase wheat feeding this summer."

Lower exports will more than offset higher domestic use. USDA said wheat production in several regions, particularly Europe, is set to rebound, resulting in more export competition in 2021-22.

The tighter balance sheet supports a stronger national average farm-gate price of $5.50 per bu, up $0.50 from 2020-21.

Chris Clayton can be reached at Chris.Clayton@dtn.com

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