A flurry of Department of Agriculture reports Wednesday showed bin-busting production of corn, sorghum, soybeans and cotton took place in 2021, largely matching what traders were expecting to see.
USDA’s annual crop production summary reported record yields of corn and rice as well as the highest soybean production figures on record in 2021. That report, along with the department’s January World Agriculture Supply and Demand Estimates, was released Wednesday and fell largely in line with many trade expectations.
Last year’s corn production was pegged at 15.1 billion bushels, a 7% increase over the 2020 estimate by way of a record 177-bushel-per-acre corn yield and a 4% boost to harvested area to 85.4 million acres.
The report also detailed record soybean production at 4.44 billion bushels, a 5% increase over 2020. Soybean acreage and yield also went up with a slight increase to 51.4 bushels per acre and a 5% rise in harvested area to 86.3 million acres.
Rich Nelson, chief strategist for Allendale Inc., said market trading had largely baked in the expected figures, leading to light movement in commodity prices.
“Before the report, we weren’t as concerned about the U.S. balance sheet because the market is trading on South American weather risk,” he said. “After the report, we’re still kind of ignoring the U.S. balance and we’re still trading the weather risk.”
The WASDE report offered an update on South America’s production, slashing anticipated soybean production in Brazil and Argentina by a combined 8 million metric tons; USDA reported 139 MMT for Brazil and 46.5 MMT for Argentina. That reduction was higher than trade expectations. Corn production for the two countries took a more modest cut to the tune of half a million metric tons; Brazil is expected to produce 115 MMT and Argentina’s figure came in at 54 MMT.
The South American cuts were part of broader cuts to global stocks for corn – 303.1 million tons, down 2.5 million – and soybeans, which were down 6.8 million tons to 95.2 million.
Nelson said one surprise was a corn exports cut of 75 million bushels to 2.42 billion bushels, a move the WASDE report said was “reflecting expectations of increased competition from other exporters.”
“Most exporters will be ignoring USDA’s numbers as far as lowering corn exports in this report,” he said. Exporters are a little more unsure about soybean trade. “There’s no way we’re going to see Brazil not retake the export market, the only question is how aggressively they retake the export market.”
China, Nelson added, is unlikely to be a major player for corn purchases “in the very, very short term,” a timeframe he said would last about two months.
Some other key figures from the reports:
- U.S. sorghum production in 2021 was estimated at 448 million bushels, a 20% increase from 2020. Planted area was up 24% and harvested area – 6.49 million acres – was up 27%. Yield was the only sorghum figure to take a hit, down 4.2 bushels to 69 bushels per acre.
- Rice production took a 16% cut from 2020 and totaled 192 million hundredweight in 2021. Area planted and harvested both dropped 17%, but average yield was a record 7,709 pounds per acre, up 90 pounds from 2020.
- Cotton production jumped 21% to 17.6 million 480-pound bales. The harvested area was up 20% to 9.97 million acres.
- The 2022 total red meat and poultry forecast was raised on higher beef and broiler production, offsetting reduced pork production estimates. USDA left the 2021 milk production estimate unchanged.
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