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USDA Worksheet and SAM Crop Outlook


Update for February 10th, 2022

The USDA announced the February WASDE report yesterday. Brazilian soybeans saw the largest adjustment as estimates were cut by 5 million tons from January estimates, but still fell within the trade range as did most of the other categories. While the World Grain carryout numbers were bigger than the trade had expected they did not offer enough of a difference to change price movement. In general, this is the most neutral report we have had in quite some time.

Until recently corn was winning the acreage battle for 2022, that has all changed though as “the soybean market may be the corn markets best friend as of late”. SAM weather issues have propelled soybean prices which has moved them into the lead and corn prices seem to be along for the ride. Brazil is now harvesting soybeans and producers in the state of Mato Grosso report that approximately 50% of the soybean crop has been harvested thus far. Last year this region had less than 15% finished at this time vs the average of 30%. This now means that the second-crop corn will be planted earlier than normal and should reach pollination during a more optimal time than the later planted acres which typically see much hotter temperatures during that critical stage. In fact, there are analysts that are projecting Brazil’s second-crop corn in 2022 may out produce the entire corn crop produced in 2021. As corn growers in SAM begin their planting season they are faced with a shortage of Atrazine. The soybean grower group Aprosoja Brasil and the corn lobby Abramilho have reported multiple complaints from across the country of Brazil that there are supply issues as orders for the important product are suddenly and unexpectedly being canceled. This comes as farmers are planting their Safrinha crop which accounts for 70-75% of the corn bushels grown in the country each year. Atrazine is an extremely important product in Brazil as it is the only herbicide used to control broadleaf weeds and is the main herbicide of choice for corn acres. (Reuters)

CONAB (Brazil’s USDA) announced the February soybean crop estimate this morning where they slashed projections by 15 MMT down to 125.5 MMT from 140.5 just one month ago. The market is processing this latest projection, which is one of the lowest so far from any government or private group including our USDA that just yesterday forecast a yield of 134 MMT for the Brazilian crop. Given current estimates the SAM soybean crop will be at least 800 million bushels lower than pre-season estimates and could easily be 1 billion bushels less. The magnitude of this season’s SAM yield loss is put in to perspective when you compare that the expected reduction in total yield is equivalent to nearly 25% of the total soybeans grown in the U.S. during the record breaking 2021 season.

Argentina’s soybean crop is in a critical stage of development and the weather outlooks offer only minimal rainfall opportunities for key corn and soybean growing areas and no rainfall for other regions. Last week the Rosario Grain Exchange said that the soybean crop will face a “make or break period” once again as the risk of drought returns.

NOAA’s precipitation outlook for today through next Thursday shows precipitation for most of the country.

Looking down the road a bit further to the last week in February current models show a warm up for a large portion of the U.S. The first map below shows the EURO models temperature departures from normal for February 23rd. This model basically shows “a blow torch with Pacific air bathing the nation.”

The GFS model shows a western trough digging deeper in to the northwestern states but it also shows a bunch of warmer than normal temps for the rest of us. This map shows the GFS estimates for February 23rd temps as well.

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