Esse texto é de autoria de Angie Setzer, consultora de Grãos da Marex US.

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The January USDA update is one of the most important on the calendar, providing a significant amount of new data for traders to digest. Final production figures will be released for summer row crops, with usage reconciled through quarterly stocks. We will also receive our first look at winter wheat planted acreage.

While the January report always carries elevated risk, this year’s update could carry with it some notable surprises. Last fall’s government shutdown delayed the analysis of the USDA’s objective yield data, raising questions about the reliability of the November estimate. Cash market strength in both soybeans and corn throughout harvest led many in the industry to expect a reduction in yields, leaving disappointment when the USDA made only minor adjustments in the November update.

Outside of the US, traders will be watching how the USDA handles Black Sea shipments, especially out of Ukraine. While the export pace out of Russia has improved in recent months, the logistical challenges in Ukraine will take a significant amount of time to remedy. With an estimated 10% of the country’s corn crop still sitting in the field at the start of last month, there is potential the USDA may revisit their production estimate as well.

Traders are generally expecting modest increases to Argentina’s corn and soybean crops, with increased production seen out of Brazil as well. Traditionally, the USDA is a bit more conservative with South American production adjustments in this report. However, as it stands currently, they are below the market consensus in their estimates and may use this update to correct that.

Corn

Monday’s corn yield will be one of the most important data points. Ahead of the report, traders are expecting a record corn yield and a massive crop, with the average analyst estimate coming in at 184 bushels per acre. The pre-report range is exceptionally narrow, and historically it is rare to see the USDA adjust corn yields by more than 2 or 3 bushels per acre between the November and January reports.

The dramatic increase in acreage reported from June to November is something we have never seen before. This unusually large miss by NASS has prompted questions on whether harvested area could be revised, though such a move would be unprecedented. Overall, production is expected to come in roughly 1.66 billion bushels larger than last year at 16.552 billion bushels.

Production will be the most important input on Monday for corn, as the USDA will find it difficult to increase demand from already lofty levels. Export sales and ethanol usage have been off to a fantastic start in the first quarter of the marketing year, with both setting weekly records. While this strength is encouraging, the USDA is already projecting record usage in both categories, limiting the upside potential for additional demand increases in the months ahead.

Feed and residual usage has been a major point of discussion and is also projected at a record high. Of course, one contributing factor in the elevated usage figure is the record production estimate. A portion of residual usage is tied to the production estimate, though when pressed, no one at the USDA had much of a formula to offer on how that is approached. This means that the elevated feed and residual figure could see an aggressive trim if production were cut, working to offset much of the loss in ending stocks.

With all of this, trade is expecting ending stocks to come in just under 2 billion bushels at 1.972 billion.

Overall, the corn market feels as though it will be comfortable with a 182-184 type yield and a 1.8-2.1 billion bushel carryout as our attention shifts to South America and next year’s production potential. Any major deviation from that could create an explosive price move as funds are sitting relatively neutral and the market has been consolidating.

On the global front, it is unlikely we will see any major changes to the overall supply and demand picture. We could see some increases in Argentina production, with cuts in Ukraine but the two would likely offset each other. We will also be watching the USDA’s handling of domestic demand in Brazil as rapid expansion in corn-based ethanol production has changed the dynamics of their market.

Soybeans

Continue reading in the: Friday Footnotes