USDA report bullish for corn, bearish for soybeans. Thursday, March 31, 2022

I wrote this morning about how on these USDA March reports that you will often get a 4% or 30¢ trading range in corn and 67¢ trading range in soybeans, and that happened again in 2022.

Corn had a 38¢ trading range and July soybeans had a 62¢ trading range. Wheat futures were also very volatile with July CBOT showing a 63¢ trading range.

At the close today, May corn futures closed up 10¾¢ higher with December corn at new contract highs at $6.83¾. Soybean futures closed 46¢ to 49¢ lower. Wheat futures were very volatile today with CBOT wheat closing down 21¢, KC wheat down 15¢, and Minneapolis wheat up 21¢.

Crude oil was down $760 per barrel and the stock market is lower again.

The big surprise in the USDA reports was the corn and soybean planted acreage intentions. Farmers really cut back on corn with the planting intentions coming in at just 89.49 million acres, 2.5 million acres below the average trade estimate and over 4 million acres less than last year. Most of the corn acres went over to soybeans where the report showed 2.2 million acres more soybeans.

It has been a very volatile first quarter of trade.

Wow, it has been another volatile day! Corn has had a trading range of 38¢, soybeans have had a 40¢ trading range, and wheat has had a 60¢ trading range.

Currently, corn prices are 15¢ to 28¢ higher, soybeans are down 20¢ to 27¢, and wheat futures are 12¢ to 44¢ higher.

The USDA reports were bullish for corn, bearish for soybeans, and slightly bullish for wheat. The big surprise was the Prospective Planting report that showed 2.5 million acres less corn than expected. Soybean acreage came in 2.2 million acres above trade estimates. The total corn and soybean acreage came in at 180.5 million acres.

USDA REPORT: SUMMARY FOR U.S. GRAIN PROSPECTIVE PLANTING (MILLION ACRES)
CORN
Today’s estimates: 89.490

Average: 91.995

Range: 89.7 to 93.5

USDA 2021: 93.357

SOYBEANS
Today’s estimate: 90.955

Average: 91.995 to 88.809

Range: 86.0 to 92.2

USDA 2021: 87.195

ALL WHEAT
Today’s estimate: 47.351

Average: 47.763

Range: 46.2 to 48.9

USDA 2021: 46.703

WINTER WHEAT
Today’s estimate: 34.236

Average: 34.367

Range: 33.7 to 35.6

USDA 2021: 33.648

SPRING WHEAT
Today’s estimate: 11.200

Average: 11.727

Range: 10.5 to 12.5

USDA 2021: 11.420

DURUM WHEAT
Today’s estimate: 1.915

Average: 1.721

Range: 1.5 to 1.8

USDA 2021: 1.635

U.S. STOCKPILES ON MARCH 1, 2022 (MILLION BUSHELS)
The grain stocks report showed slightly less corn than expected, more soybeans than expected, and about 20 million bushels less wheat stocks than expected.

CORN
USDA 2022 estimate: 7,850

Average: 7,885

Range: 7,630 to 8,087

March 2021: 7,696

December 2021: 11,642

SOYBEANS
USDA 2022 estimate: 1,931

Average: 1,893

Range: 1,602 to 1,965

March 2021: 1,562

December 2021: 3,152

WHEAT
USDA 2022 estimate: 1,025

Average: 1,064

Range: 998 to 1,325

March 2021: 1,311

December 2021: 1,378

Now that the reports are factored in, the key will again be the war in Ukraine. Starting in April more focus will be on U.S. weather and planting conditions. The weekly USDA crop condition reports will start next Monday.

The headline news out of Ukraine today is viewed as positive for grain prices as the war rages on. At this hour corn prices are 2¢ to 4¢ higher, soybeans are 2¢ to 3¢ higher, and wheat prices are 7¢ to 10¢ higher. The lows from Tuesday are likely to hold unless the USDA reports are wildly bearish.

My early thoughts ahead of these very important reports.

The average price range on the day of the reports for corn and soybeans the last several years has been 4%. This would suggest that you get ready for a 30¢ trading range in corn today and a 67¢ trading range in soybeans.

When you look at the reports and the trade estimates vs. the actual USDA numbers, the trade tends to overestimate corn acres and underestimate soybean acres. The big variable this year will be whether the USDA numbers for corn and soybeans add up to 180 million acres or more.

For the grain stocks I do not see any trend of what the grain stocks are vs. trade expectations other than when prices are really low, we tend to use more, and that will often result in smaller grain stocks and a positive price response. The opposite is true especially for corn that when prices are high, usage comes in less than expected, which is often negative for prices.

Author: Al Kluis

Successful Farming

Tags: wheat, futures, corn, USDA, grain, prices, soybeans