USDA January Report Worksheet and SAM Crop Forecast
The highly anticipated USDA January report was released yesterday and contained a few surprises for traders, analysts and farmers. Final production totals for both corn and soybeans for the 2022 growing season were expected to increase in this report but instead the agency reduced final corn production by 200 million bushels and soybeans by 70 million. Prior to the report the trade had expected to see larger U.S. carryout estimates than those in the December report but each were actually lowered. Additionally, world corn carryout was lowered by about 2 million ton, worldwide soybean carryout was raised by nearly 1 million ton. While the U.S. final corn yield was increased by 1 bushel per acre to 173.3, the 1.64 million acre decrease in harvested acres more than compensated for the larger per acre yield. Soybean production was lowered due to a decrease in final yield by 0.4 bushel per acre as well as a reduction in harvested acres of 295,000.
Crop conditions in Argentina have prompted some groups to cut crop production estimates. The Rosario Grain Exchange expect a massive yield loss for the nation’s soybean crop lowering their outlook from 49 MMT down to 37 MMT a cut of 25% to 30% from pre-season estimates. The Exchange also cut expected corn production from 55 MMT down to 45 MMT and have warned that acreage losses will be drastic without “imminent help” (rainfall). Some believe the current drought in Argentina is the worst seen in 6 decades. A drought does not require a complete absence of precipitation and over the past few days some key corn and soybean growing areas have seen up to an inch of rainfall with much lower totals in other areas. The outlooks show more opportunities for widespread precipitation through January 26th but you have to wonder if it is arriving in time to actually improve yields or is it “too little, too late” and how will the ongoing drought affect the amount of 2nd crop corn acres farmers decide to plant?
Brazil’s crop outlook is much rosier than their SAM neighbor, Argentina. The latest estimates from the private group AgroConsult kept the soybean crop outlook steady from their previous estimate of 153.4 MMT. They did raise their corn production outlook from 125.8 MMT to 130.9 MMT. Unlike Argentina most of Brazil has received ample precipitation over the past 3 to 4 months although far southern Brazil is dry. AgroConsult will be conducting field assessments across 12 states which account for 95% of the nation’s total crop production. The group predicts that if farmers plant the expected 43.2 million 2nd crop corn acres, production could be 9 MMT higher than the crop in 2022. (Reuters) The break from frigid temps and abundant snowfall is likely coming to an end soon. The MJO is projected to move into its colder phases. It is currently entering phase 8 but will move through Phase 8, 1 and 2 between now and February 9th and then onto Phase 3. The first 3 maps below show the expected temps for January according to the MJO scale. The following 2 larger maps show the expected weather pattern for Phase 3 during February, which looks cold and wet over our region.
So why aren’t we experiencing Phase 8 type temps if we are entering the Phase now? One reason is because it can take up to a week for cold phases to mature after entering the phase. Another factor is the lack of ridging over the western coast of the U.S. which is a major ingredient needed when bringing in cold temps from Canada into the Midwest. Hopefully the air from Siberia does not make its way over the North Pole and ultimately into the U.S. In the past few weeks Siberia has reported the lowest temps seen in decades dipping down to -60 degrees!
Looking at the coming week both the EURO and GFS long-range snowfall forecasts show some parts of the Midwest are in for a significant snowfall between January 19th and the 23rd. Both the model maps are included below. The amount and the track can easily change in the meantime, but this gives us a hint of what could develop.