December Crop Production And Supply Report Comments

One of the first comments I saw regarding USDA's December Crop Production and Supply and Demand reports was that someone must have just copied and pasted last month's reports into the file. A quick glance through the numbers would seem to confirm this idea, with not a single change seen among the three major grains (corn, soybeans and wheat). That means domestic corn ending stocks held at 2.403 billion bushels, soybean ending stocks still read 480 million bushels, and wheat still showed a whopping 1.143 bb. And as would be expected, ending stocks-to-use didn't change either, coming in at 16.4% for corn, 11.7% for soybeans and 50.4% for wheat. World ending stocks, though, were a different story. There USDA increased all three from November's estimate, due in large part to adjustments in production. Corn ending stocks climbed 4.1 million metric tons to 222.3 million metric tons, with Brazil's production increased by 3 mmt and the 12 nations of the former Soviet Union estimated to see a 1 mmt bump. The world soybean ending stocks figure came in at 82.9 mmt, as compared to November's 81.5 mmt. Here the reason is harder to find, with global production increased by 2 mmt but not tied to any country on WASDE's released list. World wheat ending stocks were pegged at 252.1 mmt, up 2.9 mmt from November. An expected increase of 4.7 mmt in Australia's production was offset only partially by an increase in Australian demand. As for world ending stocks-to-use, corn was calculated at 21.7%, a slight increase from 21.4% last month. This continues to inch closer to the previous high of 21.9% reported at the end of the 2001-02 marketing year when U.S. cash corn had an average calculated price of $1.97. Soybeans saw a bottom-line figure of 25.1%, also a slight increase from November's 24.8%, closing in on the 25.7% reported at the end of the 2014-15 marketing year. World wheat ending stocks-to-use grew to 34.1%, also narrowing the gap with its previous high of 34.7% from 2001-02 when U.S. cash wheat averaged a price of $2.78. Initial market reaction, as one would expect, was minimal.