CBOT weekly outlook: Look for May USDA report to be bullish

New WASDE will include first projections for 2021-22

The USDA building in Washington, D.C. (Art Wager/iStock/Getty Images)

MarketsFarm — With the next supply and demand estimates from the U.S. Department of Agriculture (USDA) a week away, broker Ryan Ettner provided his outlook on the report.

“[Soybean] exports have been good enough to meet the USDA’s expectations,” but maybe not enough to adjust any of their numbers, said Ettner, a broker for Allendale Inc. at McHenry, Ill., adding there’s likely to be little change to the soybean carryout in the May estimates.

In April, USDA pegged soybean exports for the 2020-21 marketing year at nearly 62.1 million tonnes in its world agricultural supply and demand estimates (WASDE) and called for ending stocks of more than 3.2 million tonnes.

At about 55.5 million tonnes, U.S. soybean exports were 64.2 per cent ahead of those at the same point in 2019-20, according to the department’s most recent export inspections report, and well within reach of exceeding projections.

Ettner said U.S. corn exports have been quite strong as well during the current marketing year. To date, almost 43.4 million tonnes have been shipped, putting exports at a remarkable 82.4 per cent ahead of those in 2019-20. He predicted USDA will slightly increase corn exports by 1.2 million to 2.5 million tonnes while “leaving a lower old-crop carryout.”

Of significance, the May WASDE will include projections for 2021-22 for the first time.

“They will be fairly tough to guess, but we will start with low numbers,” Ettner said of the coming report, which is likely to be bullish.

The analyst suggested those 2021-22 numbers for soybeans and corn should increase with successive reports, providing a more accurate picture.

As for wheat, he noted the last few WASDEs have been quite neutral and he expects the May report to follow suit. Should the spring wheat growing areas of the U.S. receive sufficient rain this spring and summer, then those wheat projections could be revised.

April estimates from the International Grains Council (IGC) forecast U.S. soybean production in 2021-22 to reach 120.8 million tonnes, with exports of 59.3 million and ending stocks of 3.2 million.

The council projected U.S. corn production to be 379.5 million tonnes, with exports of 62.5 million and ending stocks of 34 million.

The IGC predicted U.S. wheat production to be 51.1 million tonnes, with exports at 25 million and ending stocks at 21.1 million.

USDA is scheduled to issue the May WASDE on May 12 at 11 a.m. CT.

— Glen Hallick reports for MarketsFarm from Winnipeg.

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