US Spring Crop Plantings Smaller Than Expected; South American Crushers Lose to US Crushers; Wheat Supply Firms

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  • Despite a recent pick-up in the harvest and loadings pace, incremental selling by Brazilian farmers has dropped as the cumulative harvest has been slow relative to the existing contract commitment.
  • Up until March 12, Brazilian farmers have pre-sold 63% of the 20/21 soybean production, compared to 61% a year ago and the 5-year average of 49%.
  • Brazil soybean harvest is significantly delayed this year, causing the export window to overlap with that of sugar. As global sugar and soybean prices rallied, soybean and sugar are battling for the capacities at Santos.
  • While new crop sugar harvest is likely delayed, the old crop inventories were at a 3-year high. Both sugar and soybean prices are in a big inverse, which provide exporters to push out the crops as fast as possible. Demurrage cost has risen from 18,000 USD/Day to 30,000.
  • Soybean crushers in South America were faced with tight bean supplies. The shortage of old crop supply in Brazil was a result of massive bean selling and exporters earlier in the season, led by the weakening Real. This has meant very little beans available for crushers in the old-new crop transition months.
  • Argentine farmers have been very reluctant sellers with the government export tariff policy. A delay in the harvest of Paraguayan beans (a major source of supply for Argentine crushers before the Argentine harvest in April) further exacerbated the supply shortage.
  • US meal loading since the start of the crop year in Oct 2020 have benefitted from the pinch in South American meal supplies.
  • The US soybean planted area at 87.6 mln acres by the March Prospective Plantings Report was below the average market estimate and February outlook report of 90.0 mln acres.
  • Applying the new acreage and balance sheet published in the February outlook, it implies 21/22 US ending stocks of 24 mbu, which would be unbearably tight and requires further rationing of demand. The April WASDE report will show these adjustments.

US vs Brazil Soybean Loadings By Month


  • The March prospective plantings and quarterly stocks were both bullish for corn.
  • The US corn planted area at 91.1 mln acres were below the average market estimate of 93.1 mln acres and the 92.0 mln acres reported in the February outlook. The planted area is only slightly above last year’s final area of 90.8 mln acres while way below the last March estimate of 97 mln acres.
  • Applying the new acreage and balance sheet published in the February outlook, it implies US 21/22 ending stocks of 1,387 mbu, or stocks-to-use ratio of 9.1%, down YoY and the lowest since 12/13.
  • While total Mar 1 stocks were down 3% YoY, on-farm stocks were down 9% YoY while off-farm stocks were up YoY, indicating faster farmer selling this season so far.


  • FOB prices fell further last week due to weak demand and increasingly better-looking winter wheat in southern Russia in particular.
  • Following the raise of the Russian production by 3.1 mmt to 79.3 mmt by SovEcon in March, Ikar raised the crop by 1.8 mmt to 79.8 mmt. Both estimates are still below last year’s record crop of 85.3 mmt, but the 3rd highest on record.
  • The IGC has estimated the global wheat production at a record 228.7 mmt, while ending stocks remain tight at 60.9 mmt, flat YoY.
  • The IGC expects France to produce 37.3 mmt of wheat, up 6.9 mmt YoY. China has risen to be the 2nd biggest wheat importer of EU wheat this crop year so far, trailing only Algeria and importing 1.8 mmt since July 2020. The exporting pace to China has slowed recently as China switched to buying the competitive Australian wheat.
  • The US wheat area at 46.4 mln acres was up YoY, led by higher winter wheat areas, though total wheat area remained the 4th lowest on record. The bean+corn pool expansion was smaller than expected and partially offset in wheat.

Australia Wheat Loadings and China Offtake By Exporting Country