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USDA tightens U.S. corn, soybean balance sheets

The USDA’s production reductions for corn and soybeans, along with lower beginning stocks, led to tighter 2020/21 ending stocks projections, especially for soybeans, which are now expected to fall below 300 million bushels following a boost in the export demand estimate, while wheat was down from September. The USDA’s corn for ethanol use guess was down on the month and exports were unchanged, even with the strong demand from China.

2020/21 U.S. wheat ending stocks are pegged at 2.096 billion bushels, compared to 2.086 billion in September and 2.089 million for 2019/20. On the supply side, beginning stocks, production, and imports were all down on the month, leaving the supply at 2.979 billion bushels. For demand, the sole change was seed up, up 10 million bushels to 100 million, for total use of 2.096 billion bushels. The average 2020/21 farm price is estimated at $4.70 per bushel, compared to $4.50 a month ago and $4.58 a year ago.

2020/21 U.S. corn ending stocks are seen at 2.167 billion bushels, compared to 2.503 billion last month and 1.995 billion last marketing year. Month to month, the USDA cut beginning stocks, or 2019/20 ending stocks, and reduced production, putting the supply at 16.742 billion bushels. For demand, the USDA lowered estimates for most major categories, except exports, for total use of 14.575 billion bushels, 100 million lower. That included a reduction in ethanol use, from 5.1 billion to 5.05 billion bushels. The average 2020/21 farm price is estimated at $3.60 per bushel, compared to $3.50 in September and $3.56 for 2019/20.

2020/21 U.S. soybean ending stocks are projected at 290 million bushels, compared to 460 million a month ago and 523 million a year ago. The USDA lowered beginning stocks and production for a supply total of 4.806 billion bushels, a cut of 97 million. Exports were increased 75 million bushels to 2.2 billion, while residual use was a little lower, for total use of 4.516 billion bushels, compared to 4.442 billion in the prior report. The average 2020/21 farm price is estimated at $9.80 per bushel, compared to $9.25 last month and $8.57 last marketing year.

Lower U.S. corn and soybean production estimates contributed to tighter world ending stocks projections for both crops. The biggest changes by the USDA for the global corn and soybean carryout expectations were to the U.S. production guesses, with no changes for South American corn and soybean production or exports. The USDA also left China’s corn import estimate unchanged at 7 million tons, matching Beijing’s estimate. Just over a month into the marketing year, purchases have already passed that mark, but most of that corn still needs to be shipped. 2020/21 soybean imports by China were up 1 million tons at 100 million. World wheat ending stocks were up from September following increased production outlooks for Russia and the European Union, which canceled out reductions for Ukraine and Argentina, all of which are currently experiencing weather issues with new crop planting.

2020/21 world wheat ending stocks are expected to be 321.45 million tons, compared to 319.37 million for September. Production is estimated at 773.08 million tons, up 2.59 million on increased estimates for the European Union and Russia, which offset decreases for the U.S., Canada, Ukraine, and North Africa. Domestic feed use is seen at 134.6 million tons, compared to 134.62 million a month ago, with exports at 189.92 million tons, compared to 189.44 million last month.

2020/21 world corn ending stocks are projected at 300.45 million tons, compared to 306.79 million a month ago. Global production is expected to be 1.159 billion tons, compared to 1.162 billion for the last guess, with declines in the U.S., Ukraine, and European Union. Domestic feed use is estimated at 731.31 million tons, compared to 733.11 million last month, with exports at 184.47 million tons, compared to 186.03 million in September, following a reduction for Ukraine.

2020/21 world soybean ending stocks are estimated at 88.7 million tons, compared to 93.59 million last month. The world crop is seen at 368.47 million tons, compared to 369.74 million in the prior report, following cuts for the U.S. and the European Union. Domestic crush use is pegged at 322.42 million tons, compared to 320.8 million in September, with exports at 167.88 million tons, compared to 166.34 million a month ago on an upward revision for the U.S.

The USDA’s next set of supply and demand estimates is out November 10th.

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