Corn, soybeans, and wheat bearish

Higher corn and soybean production in Brazil is bearish. U.S. corn ending stocks unchanged, soybean ending stocks up 10 million bushels, wheat ending stocks up 30 million bushels. Watch the close in relation to noon time price activity.

Before the report corn was unchanged, soybeans down 5 cents, wheat unchanged. Shortly after the report corn was down 4 cents, soybeans down 10 cents, wheat down 4 cents.

Today producers likely have more attention than normal focused on the USDA reports at noon. It is because they are in the shop and not out in the fields. Corn planting in the U.S. is 3% complete with 3% average.

USDA 2016-17 U.S. grain and soybean ending stocks

USDA April

Average of

Range of

USDA March

2016-17

analysts’

analysts’

2016-17

end-stocks

estimates

estimates

end-stocks

estimates

estimates

Wheat

1.159

1.147

1.100-1.200

1.129

Corn

2.320

2.352

2.270-2.484

2.320

Soybeans

0.445

0.447

0.410-0.475

0.435

 

Closely watched will be U.S. ending stocks of corn, soybeans, and wheat along with corn and soybean production in Brazil and Argentina.  USDA will release their first supply and demand estimates for 2017-18 corn, soybeans, and wheat next month on May 10. The new crop May report date is standard procedure that has been in place for decades.

U.S. corn ending stocks were estimated at 2.32 billion bushels. Last month it was 2.32 billion bushels. Soybean ending stocks were estimated at 445 million bushels. Last month they were 435 million bushels. U.S. wheat ending stocks were 1.159 billion bushels. Last month they were 1.129 billion bushels.

USDA estimated Brazil soybean production at 111 million tons. Last month it was 108 million tons. USDA estimated Brazil’s corn production at 93.5 million tons. In March it was 91.5 million tons.

Trade estimates for U.S. ending stocks of corn, soybeans, and wheat all are slightly above those seen last month. U.S. grain stocks on March 1 were all above trade expectations on the March 31 Grain Stocks Report. This alone helps push ending stocks a small amount higher.

Corn and soybean production from Brazil will also be closely watched as traders are expecting additional increases, following increases in March.  CONAB, Brazil’s crop reporting agency, estimated their soybean production at 110.2 million tons, up 2.6 million tons from March.  In March USDA estimated Brazil’s soybean production at 108 million tons, up 4 million tons from February. Last month USDA estimated corn production in Brazil at 91.5 million tons, up 5 million tons from February.

USDA world production

April USDA

March USDA

April USDA

March USDA

2015-16

2015-16

2016-17

2016-17

estimate

estimate

estimate

estimate

Argentina wheat

11.30

11.30

16.00

16.00

Australia wheat

24.17

24.17

35.00

35.00

Canada wheat

27.59

27.59

31.70

31.70

Russia wheat

61.04

61.04

72.53

72.50

South Africa corn

8.21

8.21

15.00

14.60

China corn

224.63

224.63

219.55

219.55

Ukraine corn

23.33

23.33

28.00

28.00

 

March 1, 2017 U.S. soybean stocks were higher than expected. Soybean demand in its entirety can be measured much easier than corn or wheat demand. Both corn and wheat are fed to livestock, not an easy number to measure accurately. On the other hand, soybean demand consists largely of exports and meal demand. Each week we see USDA detail grain exports. Monthly there is the NOPA report on soybean crush. With traders missing the March 1 soybean stocks number by 51 million bushels, there is growing sentiment USDA underestimated soybean production in 2016. USDA will begin to account for that in the residual column. Keep in mind that changes to 2016 soybean production won’t take place until the Oct. 12 USDA Supply and Demand Report and follows the release of the Sept. 29 Small Grains Summary Report.

 

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