A raft of report releases by the USDA have done little to stir up grain and oilseed markets. Changes to forecasts were largely in line with market expectations. The only major surprise was the bigger than anticipated cuts made to South American crop production due to the negative influence of La Nina.


  • All wheat stored in all positions in the US as of December 1, 2021 totaled 1.39 billion bushels, which is down 18% year-over-year. Durum wheat stored in all positions declined 30% year-over-year. Although the decline in wheat stocks is notable, this fell in-line with pre-report expectations.
  • US Winter wheat plantings are projected to total 34.4 million acres which is up 2% compared to the 2021 crop year and was in line with market expectations.
  • Projected US wheat ending stocks increased by 30 million bushels due to changes in supply and use.
  • There were marginal changes to projected global wheat supplies and use this month. Notably the USDA increased production forecasts for the EU (+0.2 mmt) and Argentina (+0.5 mmt), which were partially offset by reductions in Brazil and Paraguay due to drought conditions.


  • Corn stored in all positions in the US as of December 1, 2021 was 11.6 billion bushels, up 3% year-over-year.
  • The USDA raised their 2021/22 corn area by 100,000 acres to 93.4 million acres. The projected corn yield was left unchanged at 177 bushels/acre, leading to a ~50 million bushel increase in total supply.
  • The USDA increased projected total corn use by 5 million bushels. Projected ethanol use increased by 75 million bushels, corn used for glucose and dextrose rose by 5 million bushels, and projected exports were lowered 75 million bushels.
  • Projected US corn ending stocks were raised 47 million bushels to 1.54 billion bushels due to the combined changes made to corn supply and use.
  • Projected global corn ending stocks were lowered ~2.5 mmt, largely due to reduced production in South America. Drought has impacted the earlier planted corn in Argentina (-0.5 mmt) and Brazil (-3 mmt) however weather later in Q1-2022 will be more important for Brazil’s second corn crop and later planted corn in Argentina. Corn production in Ukraine was raised by 2 mmt, although this only partially offset the combined cuts to South American corn production.


  • Soybeans stored in all positions in the US as of December 1, 2021 was 3.15 billion bushels, which is a 7% increase year-over-year.
  • Projected US soybean supplies increased by 11 million bushels due to a slight increase in projected yield, which was slightly offset by a 100,000-acre reduction to harvested area.
  • There were no material changes to projected US soybean use. As a result, projected US soybean ending stocks increased by 10 million bushels to 350 million bushels.
  • Projected global soybean ending stocks were cut dramatically this month (-6.8 mmt) on reduced production in South America. Drought has significantly impacted yield potential across Southern Brazil, Argentina, Paraguay, and Uruguay. As a result, the USDA reduced Brazilian production by 5 mmt to 139 mmt. This was on the low-end of analyst expectations, however several South American consultant firms have estimated that the soybean crop could be much smaller (some as low as 130 mmt), which has likely limited the gains in soybean futures post-report. Argentina’s crop was cut by 3 mmt and Paraguay’s crop was reduced by 1.5 mmt.

What does it mean?

Wheat futures were lower post WASDE report release as the cuts to US demand led to marginally higher stocks than expected. The CBOT Dec-22 wheat contract fell 1.6% in AUD terms. With the outlook for soybeans remaining tight and in high demand, this will support oilseed fundamentals into 2022.

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Key Points

  • Cuts to US wheat demand led to marginally higher stocks.
  • Drought in South America driving big production cuts.
  • Overall, the USDA reports were in-line with market expectations.

Click on figure to expand

Click on figure to expand

Data sources: USDA, Nutrien, Mecardo

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