By Doug Tenney, Leist Mercantile
Corn exports unchanged, soybean exports cut 50 million bushels, soybean crush increased 20 million bushels, wheat exports were reduced 15 million bushels.
Ahead of the report, many had expected it to be a non-bullish report for grains with traders looking for higher ending stocks for corn, soybeans, and wheat for the 2019-2020 marketing year. Next month USDA will publish their first supply and demand reports for the 2020-2021 marketing year.
Shortly after the USDA report was released, corn was up 2 cents, soybeans up 8 cents, and wheat up 7 cents. Just before the noon report, grains were mixed with corn unchanged, while soybeans and wheat were up 8 cents.
Corn not being used for ethanol has been huge in recent weeks as it dominated much discussion by grain merchants and producers alike. Shrinking demand has been major for the corn supply and demand table. Nearby corn basis in many Ohio locations the last two weeks has weakened 20 to 30 cents or even more. In addition, the basis has dropped at least 10 cents in many of those locations in just the past week.
Numerous ethanol plants across the country have full ethanol tanks with limited options of where the ethanol can go. More and more plants are being shuttered in recent days. With less driving taking place, it directly translates into reduced gasoline demand. The weekly corn used for ethanol report from yesterday was just 66.7 million bushels, less than the trade had expected. Last week it was 83.8 million bushels, while two weeks ago it was 100.7 million bushels. The report yesterday set a new record for ethanol stocks.
Corn ending stocks were raised to 2.092 billion bushels, up from last month’s 1.892 billion bushels. The average trade estimate was 2.004 billion bushels. Soybean ending stocks were 480 million bushels while at 425 million bushels last month. The average trade estimate was 430 million bushels. Corn used for ethanol was lowered to 5.050 billion bushels, down from last month’s 5.425 billion bushels. Wheat ending stocks were 970 million bushels. The average trade estimate was 940 million bushels, which is the same ending stocks in March.
Brazil soybean production was 124.5 million tons. Last month it was 126 million tons. Argentina soybean production was 52 million tons, last month was 54 million tons.
Current weather forecasts in much of the Midwest for the next two weeks have below average to much below average temperatures along with normal rains. Some Ohio corn was planted earlier this week but in miniscule amounts compared to total Ohio corn acres. Parts of Iowa and Illinois have made huge corn planting progress the past ten days. Some producers in central Illinois report they are done planting corn. There are reports some U.S. corn acres will be switched to soybeans and cotton.
Higher corn acres in 2020 along with reduced ethanol demand it points to sharply higher corn ending stocks for next year. Trade estimates of 3.0 to 3.5 billion bushels for 2020-2021 are becoming more common. Without a weather issue the next three months, it points to lower new crop corn prices. Weather and demand will combine to be key drivers for corn prices.
Crude oil prices were higher today as talk continues to circulate of OPEC and Russia potentially reaching an agreement to cut crude oil production 10 million barrels a day. It sounds like a lot until you realize world gasoline demand has been reduced 24 million barrels a day.
CBOT grains will be closed tomorrow in observance of Good Friday.