Neutral report from USDA on April 8

By Doug Tenney, Leist Mercantile

After the noon report was released, corn was up 6 cents, soybeans up 22 cents, and wheat up 19  cents. Just before the report, corn was up 8 cents, soybeans up 25 cents, and wheat up 22 cents. 

U.S. corn ending stocks for 2021-2022 were 1.440 billion bushels, last month, 1.440 billion bushels. U.S. soybean ending stocks were 260 million bushels, last month, 285 million bushels. U.S. wheat ending stocks were 678 million bushels, last month, 653 million bushels. 

Trader estimates have U.S. corn ending stocks 1.415 billion bushels, soybean ending stocks 262 million bushels, and wheat ending stocks 656 million bushels. USDA projected China would be importing 91 million tons of world soybeans, last month 94 million tons. 

Brazil soybean production was 125 million tons, last month 127 million tons. Brazil corn production was 116 million tons, last month 114 million tons. Argentina soybean production was 43.5 million tons, last month 43.5 million tons. Argentina corn production was 53 million tons, last month 53 million tons.

New crop December CBOT corn made another new contract high this morning before the noon USDA report. When counting March 31, new corn has made new contract highs 5 times in that short period of time. New crop soybean price activity is vastly different compared to new crop corn. New crop soybeans made a contract high the first evening of the Russia/Ukraine conflict on Feb. 24 at $15.55. Since then, November soybeans had a rally high of $15.20 on March 23, then dropping to its recent low of $13.94 on April 1, which followed the bearish March 31 Prospective Plantings Report when 2022 soybean acres increased 4% compared to last year. 

Russia and Ukraine export shipping capability as well as corn and wheat production for this year continue to be big unknowns. The first 10 days of the Russia/Ukraine conflict resulted in projections that Ukraine’s grain export shipping capabilities could resume in 3-5 months. With the conflict now stretching into 30 plus days, that same resumption date now becomes, “pick one, who knows when?”

Many are anticipating that USDA will make few if any changes in those Russia and Ukraine production and export numbers with this report. It only makes next month’s WASDE Report even more significant when USDA publishes their first estimates in the supply and demand tables for new crop corn, soybeans, and wheat for the U.S. as well as the world.

Traders are expecting U.S. corn and soybean exports to increase. Earlier this week it was noted that a U.S. census report detailed U.S. corn exports to date 190 million bushels higher than the weekly export inspections report had indicated. Some are expecting with time that U.S. old corn exports could be increase as much as 300 million bushels above the March USDA export projections of 2.5 billion bushels.

Here are some weather events to keep in perspective: the U.S. Plains continues to be warm and dry earlier this week. Overnight lows were in the upper 20s  to low 30s which stresses even further the rain starved hard red winter wheat areas; Brazil’s second crop of corn got off to a fantastic start with planting progress ahead of normal. Now the central areas of Brazil are reporting less than normal rainfall with yield potential dropping; the U.S. Delta is seeing flooding take place with the flooding expanding into additional acres; much of the Dakotas as well as northern Minnesota are expecting snowfall totals of 12 to 14 inches into the middle of next week, further delaying the ability of field activity to take place.

The Food and Agricultural Organization (FAO) of the United Nations reported that world food prices in February were up a record 13%. The speed of increases for food as well as agricultural inputs has been phenomenal! 

Expect slow April planting progress for Ohio with the ongoing cool and wet conditions. Numerous weather events will continue to dominate grain prices into June.

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