• HEADLINES: USDA December report lacked statistical surprises; Now a waiting game into December; Will world wheat importers buy the break?

• The USDA December Crop Report was broadly neutral with WASDE deciding to wait until January to make any hard statistical decisions. WASDE held US 2021/22 corn and soybean end stocks steady at 1,493 million bu and 340 million bu, respectively.

• WADSE cut 2021/22 US wheat exports by 20 million bu (as expected) and imports by 5 million bu which raised 2021/22 end stocks by 15 million bu to 598 million bu. WASDE also made no change to S American corn or soy crop projections compared to November. Traders saw the report as lacking any bullish or bearish statistical impetus and the market’s focus shifts to S American weather and the flow of grain from the Black Sea amid rising political tensions.

• WASDE left US 2021/22 corn end stocks at 1,493 million bu, unchanged. WASDE decided against raising its industrial corn use estimate based on better than expected weekly corn grind. Another month of data should push WASDE to raise industrial corn use by 50-75 million bu. WASDE likely desires to see the final 2021 US corn crop size before bumping demand.

US End Stocks (million bu)

                    Nov        Dec

            2020        2021        2021

Corn            1,236        1,493        1,493

Soybeans        256        340        340

Wheat            845        583        598

• World 2021/22 corn end stocks rose by just over 1 million mt to 305.5 million mt, up 12.4 million from last year. China’s 2021 corn production was trimmed to 272.5 million mt due to the recent Stats Bureau update. China was forecast to import 26.0 million mt of world corn. The US/world corn data was non-exciting and neutral.

• In a surprise, WASDE held US soybean 2021/22 soybean end stocks at 340 million bu with exports holding at 2,050 million bu. US soybean shipments/sales have been improving, but the shortfall to catch up with last year is sizeable. We maintain that rising US soyoil demand will push the US soybean crush rate upwards by 15-25 million bu in the final count. US 2021/22 soy stocks will grow.

• 2021/22 world soybean end stocks declined by 1 million to 102 million mt based on a hike in world trade and diminished carry in supplies. Brazilian and Argentine crops were left unchanged at 144.00 and 49.50 million mt, respectively. WASDE soy data leans to be constructive with a rise in US soyoil yield being absorbed by greater industrial use. The average cash soyoil price was forecast at $0.65/lb.

• World wheat production grew by a less than expected 2.5 million mt with the Aussie crop up to 34.0 million mt, Russia up 1 million to 75.5 million mt, with Canada up 0.6 million. The Argentine crop held steady at 20.0 million mt. World wheat exports were hiked by 2.2 million mt to a record large 205 million. And WASDE is still too low with world wheat trade by 2-4 million mt in our view. We see US/French wheat futures at a bottom as WASDE is 4 million mt too high with Russian exports at 36 million mt.

Global End Stocks (million mt)

                    Nov        Dec

            2020/21    2021/22    2021/22

Corn            292.7        304.4        305.5

Soybeans        100.1        103.7        102.0

Wheat            289.6        275.8        278.2

• The midday GFS weather forecast is consistent with the overnight run for Argentina/S Brazil with heat noted next week. A weak system produces showers across La Pampa and the western half of Cordoba this weekend with rain totals of 0.25-1.25”. The southern third of Brazil holds in a dry weather pattern which is starting to harm the initial corn crop yield potential with pollination just starting. High temperatures this week range from the upper 70’s to the lower 90’s but rise to the mid 80’s to lower 100’s next week. The first real heat of the summer will be felt as soil moisture quickly retreats. The forecast is concerning for Argentina/S Brazil into 2022.