Special Market Update

Last Friday we saw the latest update from the USDA with their monthly WASDE report and saw strong market action to follow. On corn, production was taken lower by 178 million bushels, for a grand total of 14.722 billion bushels. This came from a 1-million-acre reduction to planted and harvested acres. Yield was also taken lower just a touch, from 178.5 down to 178.4. Domestic usage was revised 100 million bushels lower from a reduction of feed and ethanol by 50 million bushels each. After the cut in beginning stocks number from the quarterly stocks report (1.995 bln bu) is mixed in with the updated production estimates, 20-21 ending stocks are lower by 336 million bushels and are now estimated at 2.167 billion bushels. Looking to global balance sheets, the USDA has global corn production 3.5MMT lower on reductions in the US and in Ukraine.

Turning now to soybeans, production estimates were taken lower by 45 million bushels. Yield was left unchanged; the reduction came from planted acres which were taken down .7 mil acres to 82.3 million acres. On the demand side of things, we saw soybeans used for crush held unchanged, with soybeans for export increased by 75 million bushels. Increased exports mixed in with lower production puts carryout for the 20-21 crop at 290 million bushels, which is down from 460 estimated last month. Global balance sheets were tighter as well with global carryout taken 5MMT lower on higher demand and lower production estimates. Perhaps the biggest story in beans right now is the weather in Brazil where extreme heat has caused delays in planting. The news became widespread headlines this week giving another push higher for soybean futures. The USDA still forecasting a very large crop in Brazil, however the delay in planting extends the US export window.