USDA Preview January 2022
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While the January USDA reports usually have a big impact on the grain markets, South American weather could dominate the news this year. The data in the reports was collected prior to January 1, but most of the weather damage in South America has occurred since then. This suggests that barring a complete surprise, the corn and soybean markets will not pay much attention to the reports.
SOYBEANS
For the January 12th supply/demand report, the average trade expectation US 2021/22 soybean ending stocks is 353 million bushels, with expectations ranging from 305 to 411 million. This would be up from 340 million in the December update. US soybean production is expected to come in around 4.434 billion bushels (4.396-4.484 range), up from 4.425 billion in December.
World soybean ending stocks are expected to come in near 99.7 million tonnes (95.0-103.6 range), down from 102 million in December. The trade is looking for the USDA to lower Brazil’s production by 2.5 million tonnes and Argentina’s by less than 1 million for the report, but with the hot and dry weather forecast for the next week, traders think Brazil's production could eventually be lowered by about 13 million tonnes and Argentina's by 4 million tonnes.
For the grain stocks report, the average trade expectation for December 1, 2021 US soybean stocks is 3.128 billion bushels (2.975-3.227 range) versus 2.947 billion for December 1, 2020.
CORN
The corn market looks poised for a further advance over the near term, as major yield damage is possible in the next week for Argentina and southern Brazil. There is plenty of rain in the 8-14 day forecast models for those areas, but the next seven days still look very dry, and extreme heat could cause significant deterioration to the crop before the rain hits.
Since mid-December, a large part of Argentina's main growing area has seen dry conditions. Temperatures are beginning to increase, with a wide area expected to see highs near 40 degrees Celsius (104 Fahrenheit), which could significantly stress the crops and cause permanent yield damage. The forecast does call for 1/2 to 2 inches of rain late next week, which could ease some crop concerns.
For the USDA supply/demand report, the average trade expectation for US 2021/22 corn ending stocks is 1.483 billion bushels (1.359-1.600 range) versus 1.493 billion in the December update. US 2021/22 corn production is expected to come in near 15.078 billion bushels (14.941-15.190 range) versus 15.062 billion in December. World corn ending stocks are expected to come in near 303.6 million tonnes (295-307 range) from 305.5 million in December.
December 1 US corn stocks are expected to come in around 11.607 billion bushels (11.200-11.951 range) versus 11.294 billion bushels on December 1, 2020.
WHEAT
For the winter wheat seedings report, the average trade expectation for US all winter wheat planted area is 34.3 million acres (33.3-35.6 range). This would be down from 33.6 million for 2021.
For the supply/demand report, traders are looking for US 2021/22 all wheat ending stocks to come in at 609 million bushels (580-648 range), up from 598 million in the December report. World wheat ending stocks are expected to come in around 278.7 million tonnes (275-281 range) versus 278.2 million in December.
December 1 US all wheat stocks are expected near 1.415 billion bushels (1.315-1.680 range) versus 1.703 billion for December 1, 2020.
The Buenos Aires Grains Exchange is estimating Argentina's wheat harvest at 21.8 million tonnes, up from their previous estimate of 21.5 million and up from 17 million tonnes last year.
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