USDA Reports Preview

As the Russian assault on Ukraine continues and thoughts turn toward spring planting, USDA is set to offer another round of supply and demand estimates in Friday's World Agricultural Supply and Demand Estimates (WASDE) report. South American crop estimates and Ukraine export estimates will probably get the most attention, but there could also be some adjustments to U.S. corn and soybean demand.

CORN

If you've seen the news from Ukraine lately, you know that Russian forces appear to be regrouping in eastern Ukraine but have not stopped their attacks and are leaving behind brutal images and accounts that have prompted many, including President Joe Biden, of accusing Russian President Vladimir Putin of being a war criminal. Thursday, April 7, marked the start of the seventh week of Russia's invasion and, while it is difficult to know what Putin is planning, it looks like he may be trying to secure access from eastern Ukraine to Crimea -- at least for now -- allowing Russia unrestricted access to the Sea of Azov. While Ukrainians are impressively thwarting Russia's advance, farmers are making attempts at spring planting under extremely difficult conditions where diesel fuel is in short supply and grain facilities are vulnerable to attack.

On Friday, at 11 a.m. CDT, USDA steps into this highly unusual market environment for grain prices to offer its latest estimates of the supply and demand for corn. For U.S. ending corn stocks in 2021-22, Dow Jones' pre-report survey of 18 analysts expects USDA to lower its estimate from 1.440 billion bushels (bb) to 1.400 bb.

Most of this bullish expectation for corn comes from USDA's recent lower-than-expected finding of 7.850 bb of corn stocks on hand March 1. If there is an increase in corn's demand estimate Friday, ethanol and/or exports are the likely beneficiaries. Given the rapidly spreading reports of highly pathogenic avian influenza (HPAI), it will be interesting to see if USDA shows any reduction in feed demand.

Dow Jones' survey expects USDA to only slightly lower its estimate of world ending corn stocks in 2021-22, from 300.97 million metric tons (mmt) to 300.70 mmt (or 11.84 bb). Brazil's corn crop estimate is expected to be increased, from 114.0 mmt to 115.2 mmt (or 4.54 bb). Argentina's corn crop estimate is expected to be reduced from 53.0 mmt to 51.9 mmt (or 2.04 bb). Early Thursday, April 7, Dow Jones reported Brazil's crop agency, Conab, raised its estimate of Brazil's corn crop from 112.3 mmt to 115.6 mmt or 4.55 bb.

Attention will also be given to USDA's estimate of Ukraine's old-crop corn exports, last pegged at 27.5 mmt or 1.08 bb. The market is also concerned about Ukraine's ability to produce crops in 2022, but USDA will not address the 2022-23 season until the next WASDE report on May 12.

SOYBEANS

On March 31, USDA's finding of March 1 soybean stocks landed at 1.931 bb, 38 million bushels (mb) higher than expected. Dow Jones' survey, however, expects USDA to lower its estimate of U.S. ending soybean stocks in 2021-22 from 285 mb to 254 mb, thanks to aggressive demand from both exports and profitable crush values. So far in 2021-22, export sales and shipments of U.S. soybeans total 2.033 bb, just 57 mb below USDA's current estimate with 22 weeks remaining in the season -- a strong argument for a higher estimate. If Dow Jones is correct, U.S. soybean ending stocks would be lower than the previous year's 257 mb and the lowest in six years.

Dow Jones' survey expects USDA to reduce its estimate of world soybean stocks in 2021-22 from 89.96 mmt to 88.40 mmt (or 3.25 bb). USDA's estimate of Brazil's soybean crop is anticipated to drop from 127.0 mmt to 125.0 mmt (or 4.59 bb). The crop estimate for Argentina is expected to come down from 43.5 mmt to 42.6 mmt (or 1.57 bb). On April 7, Dow Jones said Brazil's Conab slightly reduced its soybean crop estimate for Brazil to 122.4 mmt or 4.50 bb.

WHEAT

U.S. winter wheat prices continue to be the most sensitive of U.S. crops to events in Ukraine, and Friday's report is not apt to change that. It remains difficult to know how Ukraine's winter wheat harvest will go later this spring and how much negative attention it might get from the Russian military. Again, USDA won't venture any estimates of new-crop wheat Friday.

For world ending wheat stocks in 2021-22, Dow Jones' survey expects virtually no change to USDA's estimate of 281.51 mmt (or 10.34 bb). USDA's estimate of Ukraine's old-crop wheat exports will get attention, last seen at 20.0 mmt (or 735 mb).

On March 31, USDA reported 1.025 bb of March 1 wheat stocks in the U.S., the lowest total in 14 years. However, Dow Jones' survey expects a 1 mb increase in USDA's estimate of U.S. ending wheat stocks on Friday, from 653 mb to 654 mb. It is no secret U.S. wheat exports have struggled in 2021-22 as sales and shipments are down 24% from a year ago.

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Join us at 12:30 p.m. CDT Friday as we look at USDA's new estimates and what they mean for crop prices. We'll also look at the market's own clues to help understand how traders are responding to today's markets. For those busy at 12:30 p.m., there will be a link provided to replay the webinar at your convenience. Register here for Friday's April WASDE report webinar: https://www.dtn.com/…

U.S. ENDING STOCKS (Million Bushels) 2021-22
	Apr	Average	High	Low	Mar
Corn		1,400	1,475	1,310	1,440
Soybeans		254	305	196	285
Wheat		654	686	625	653
WORLD ENDING STOCKS (million metric tons) 2021-22
	Apr	Avg.	High	Low	Mar	2020-21
Corn		300.7	304.0	296.5	301.0	291.5
Soybeans		88.4	90.2	86.7	90.0	101.7
Wheat		281.5	284.1	287.5	281.5	290.3
WORLD PRODUCTION (million metric tons) 2021-22
	Apr	Avg	High	Low	Mar	2020-21
CORN
Argentina		51.9	53.5	49.0	53.0	51.5
Brazil		115.2	118.6	112.0	114.0	87.0
SOYBEANS
Argentina		42.6	44.0	40.0	43.5	46.2
Brazil		125.0	127.5	122.1	127.0	138.0

Todd Hultman can be reached at todd.hultman@dtn.com

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