USDA overnight published reports galore, including US stocks, winter wheat acreage, and of course a regular World Agricultural Supply and Demand Estimates report.
This USDA report has sharply lowered its estimates of US soybean and corn production.
The maize figures in particular caught the market’s attention with a reduction of over 8 Mt in the US harvest and 3.8 Mt in carry-out stocks.
At 39.4 Mt, US reserves would drop by nearly 10 Mt in one year!
In fact, corn stock came in well below expectations, with US corn yield was cut to 172 bu/acre, from 175.8 prior, and corn total disappearance was higher than expected.
So, markets have been pushing new multi-year price highs on corn, and this surprise cut in stocks has started new talk that we could see world corn carryout fall again.
Maybe, demand rationing is a possible future question, but not yet noted in sufficient quantities to offset the tighter situation
South American weather concerns remain in play.
Argentine weather maps biasing slightly wetter in the current runs but questions about current impacts remain.
And in response, Chicago soared before hitting its daily limit and trading was halted (corn can only fluctuate by $ 0.25 / bu per day on the CBOT, but a new limits was intoduced for tomorrow’s session at 40¢).
The soybean harvest has been reduced too by nearly a million tonnes, to 3.8 Mt, at most since the 2012 campaign.
The soybean complex has thus leapt forward to break down the psychological resistance of $ 14 / drank for the first time in six and a half years with beans +45 3/4¢.
Matif rapeseed was +€1.5, Winnipeg +$C14.1.
Wheat also benefited from positive figures with the reduction of 3 Mt in end-of-season US stocks.
Note however, according to the USDA, the US 2021 winter wheat areas would experience their first increase in eight years.
In fact, US winter wheat seeded area was somewhat above expectations with SRW at 6.2 million acres for a total winter wheat of just under 32 million acres.
However, Chicago wheat settled up 30 1/4¢, KC +28.5¢, Minny +14 3/4¢, and Matif was up 6.5€ on the earlier close.
Black Sea wheat markets remain very firm, also, with speculation about the possible Russian tax increases and no indications that the Russian farmer has blinked and accepted weaker prices.
In fact, Russia has also announced that it wants to increase the tax of 25 € / t on wheat exports, which will come into force next month.
And Egypt’s GASC cancelled the tender prior to the USDA reports after seeing sharply higher prices.
But it’s probably not very happy to have done so, given subsequent board moves and firmness in Black Sea region cash prices.
On Black Sea area, more moisture in the form of snow is on the maps for Russian winter wheat areas, which should help provide some insulation to the crops after it falls.
However, currently uncovered fields remain at risk in the cold snap.
Aussie markets, instead, were quiet yesterday in the lead up to the reports, with grain origination ongoing but interest localized to cover existing demand.
The US dollar index was down half a point to 90.0