The USDA released several reports on Wednesday, including January’s WASDE (World Agricultural Supply and Demand Estimates Report).
Jon Driedger, vice president of LeftField Commodity Research, summarized the report.
“Not much today that was outside of expectations,” he said. “If you look at December 1 stocks, maybe a shade heavier for corn and soybeans than the market was looking for, but nothing too dramatic. A little heavier than a year ago for corn and soybeans, but more in line with expectations and nothing that shocks the market or really unexpected. In the case of wheat, stocks are down from last year. I think these are all things that the market has anticipated and built into their SMDs and so in that sense, nothing too surprising.”
Driedger says drought in South America and soybean crop concerns in Brazil and Argentina have moved the soybean market recently, noting that the USDA has also made downward adjustments in this way.
“I think in terms of the report itself, we’ll continue to digest some of the numbers. There’s a lot of information that’s come in a short time here. I think more than anything, this January report , it’s often set the tone for trading over the next month or six weeks.I think now that that’s behind us, I think the market can kind of reaffirm the numbers it was expecting. South American weather, Chinese demand, some of the usual stuff and before long we’re aiming to handicap 2022 production. I think in that sense it’s not so much the numbers themselves- same, but the fact that we’re shielded from some of that uncertainty and that the markets will be looking to the future.