MarketsFarm — The U.S. Department of Agriculture (USDA) held its world agriculture supply and demand estimates (WASDE) mostly steady for the month of December — which may result in a lack of price movement on the markets.
In its WASDE report released Thursday, USDA projects 598 million bushels of ending domestic wheat stocks for the 2021-22 marketing year, 2.6 per cent higher than the 583 million bushels it had projected last month.
This rise can be attributed to U.S. wheat exports declining to 840 million bushels — 2.3 per cent lower than the 860 million bushels projected in November.
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However, those were two of the biggest changes in the report, as ending stocks for U.S. corn and soybeans were left unchanged at 1.493 billion bushels and 340 million bushels, respectively.
World ending stocks for wheat were projected at 278.2 million tonnes, 0.9 per cent higher than November’s estimate. World ending stocks for corn were estimated to be 305.5 million tonnes, an increase of 0.4 per cent, while December’s estimate for world soybean carryout decreased 1.7 per cent to 102 million tonnes.
Ryan Ettner, a trader with Allendale Inc. at McHenry, Ill., said December WASDE reports tend to maintain most of their November projections.
“The December report now has nearly a 10-year history of very little change. This was very much as expected,” he said. “Trade did expect to be slightly supportive of corn and it wasn’t, it was neutral. (Trade) expected to see slightly bearish (soybeans) and it wasn’t, it was neutral.
“If beans traded a little bit higher today and corn a little bit lower, that wouldn’t surprise me. But as a whole to see no change in carryout for those two markets, that’s not a surprise at all.”
Ettner also added that a recent lack of wheat exports was what caused USDA to lower its estimate.
“You can sum up the whole report by saying wheat exports were lower than more than the trade thought. If you look over our last 30 days of weekly export sales, it’s fair to lower as much as USDA did,” he said, adding that some analysts thought soybean exports would also be lowered — an assessment Ettner disagreed with.
He believes this month’s report will result in little price movement on the markets until the New Year.
“This will set us up for about 20-25 days of sideways trade,” Ettner predicted. “That likely means March corn will be stuck between $5.60 and ($6 per bushel) and that could be the case for the whole month of December (all figures US$).
“Over in March beans, it’s suggested we stay between $12.20 and near $13/bu. and that’s a large range. It will probably be smaller than that.”
— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.
