LFC Comments  09/10/21 4:31:50 PM

Corn traded higher in sell the rumor buy the fact trade. Traders had been looking for a bearish report and
priced it in earlier this week. However, CZ did manage to poke out a new low for the move at 4.975
Looking at the old crop balance sheet, USDA lowered ethanol demand 40 mil bushels and exports 30 mil
bus. This put ending stocks at 1.187 bil bus. USDA could still raise feed demand next month depending
on the Sept 1 stocks number. The new crop balance sheet grew by 96 mil bus when not including the
larger carry in. USDA raised planted and harvested acreage 600k acres and yield by 1.7 bpa to 176.3.
This was one bushel larger than the average trade guess. NASS noted the highest ear count since 2018.
Ironically, the planted acreage number was very similar to the average trade guess from the March
planting intentions report of 93.24 mil acres.
USDA also raised exports 75 mil bus to 2.475 bil bus. This would be down 270 mil bus from last
year. South American corn is less expensive into Asia than US corn and Ukrainian corn will likely be
competitive in 2022. If the carryout does increase from here, it will be because exports will not
prove as robust as currently forecasted in last half of the crop year. Corn commitments are 958 mil bus vs
742 mil bus at this time last year so USDA would likely wait for sales to fall behind before making an
adjustment. Remember, this is the second highest production number on record falling second only to
2016. This is also the third highest yield on record falling short only to 2017 and 2018.
USDA lowered Brazil’s corn crop 1 mmt to 86 mmt putting them more in line with CONAB. They raised Argentina’s corn crop to 50mmt,
up 1.5 mmt following BAGE. USDA left 21/22 Chinese corn imports unchanged at 26 mmt. The US has
11.9 mmt of new crop corn sold to China vs. 8.9 mmt at this time last year. USDA did note China is
expected to have good corn yields and increased their production estimate 5 mmt to 273 mmt.
Soybeans traded both sides but popped after the report.
USDA lowered old crop soybean crush 15 mil bus as expected. This bumped the ending carryout up to 175 mil bus.
21/22 planted and harvested acreage both moved 300k acres lower while the yield increased .4 bpa
resulting in production growing by 35 mil bus to 4,374 mil bus. This was construed as slightly bullish since
it was 3 mil bus below the average trade guess. NASS noted soybean pods counts were below last year
but similar to 2016 and 2017.
. This would still be the third largest production year, below 2017 and 2018.
USDA also cut new crop soybean imports by 10 mil bus and new crop crush by 25 mil bus. New crop
crush is seen growing 40 mil bus next year to 2.180 bil bus. USDA then raised exports 35 mil bus to 2.090
bil bus, which would be down 170 mil bus from last year. Next year’s carry out is seen at 185 mil bus, an
increase of 30 mil bus from last month, but up only 10 mil bus from last year. USDA lowered the new crop
average farm price to 12.90.
Looking at the world numbers, USDA raised old crop soybean imports 2 mmt to 99 mmt. They also raised
old crop Argentine soybean exports 1.5 mmt to 5.2 mmt.
Jim Cronin
Leland Farmers Company

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