Chad Hart, ISU Extension Grain Marketing Economist, provides a summary of the latest WASDE report.
The trade was hoping to receive some additional demand strengthening, but USDA’s update provided next to no changes. The December report is almost always about demand, as the corn and soybean supply numbers are rarely changed in this month’s report (saving up the changes for the “final” estimates in January). The corn numbers remained as in November, with 2020/21 ending stocks at 1.7 billion bushels and the 2020/21 marketing year average price estimate at $4 per bushel. The only demand shift in soybeans was for domestic crush, up 15 million bushels. That lowered 2020/21 ending stocks to 175 million bushels, so the market should be getting close to “pipeline” levels (stock projections that are low enough where price can rise significantly to limit usage and hold the stocks at that level, preserving a small reserve going into the next marketing year). The 2020/21 marketing year average price estimate was raised 15 cents to $10.55 per bushel.
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