Soybean numbers friendly with stocks less than expected

By Doug Tenney, Leist Mercantile

USDA numbers today include U.S. Prospective acres and U.S. quarterly grain stocks as of March 1. 

Soybeans friendly with stocks less than expected.

U.S. acres: corn -91.9 million acres; soybeans – 87.5 million acres; and all wheat – 49.9 million acres. U.S. grain stocks: corn – 7.401 billion bushels; soybean stocks – 1.685 billion bushels, and wheat stocks – 946 million bushels. 

Note: The reports today did not include supply and demand tables which is normal on the days for U.S. quarterly grain stocks reports as well as the planting intentions report day. The next WASDE report will be on April 11. Some are already projecting that the April report will be a yawner with little changes. The recent string of 11 days or more of U.S. corn sold to China, means the threat of USDA reducing U.S. corn exports next month is drastically declining. 

Just after the noon report release, corn was up 5 cents, soybeans up 26 cents, and wheat down 10 cents. Prior to the reports, corn was up 6 cents, soybeans up 18 cents, and wheat up 2 cents. 

Average trade estimates for U.S. acres: corn – 90.88 million acres; soybeans – 88.242 million acres; all wheat – 48.852 million acres.

Average trade estimates for March 1 grain stocks: corn – 7.470 billion bushels; soybeans – 1.742 billion bushels; and wheat – 934 million bushels.  

Month end, end of the week, end of the first quarter, all take place today. 

Trader estimates for U.S. acres: The range for U.S. corn acres was: 87.7 to 92.1 million acres, a difference of 4.4 million acres, which is the widest range since 2009. The range for U.S. soybean acres is: 87.4 to 89.6 million acres, a difference of 4.2 million acres, the narrowest range since 2007. The 5-year average of the trader estimates range for soybean acres is 4.5 million acres. What does that mean for soybeans?  With the trader estimates for soybean acres detailing a narrow range at 50% of the range for the past five years, soybean acres could be surprising for all. Soybean price volatility today could be extreme.

Recent price activity for grain details that last night, May 2023 CBOT corn closed at $6.49 ½; which was up 19 cents for the month of March; high for the month, $6.55 1/2; low for the month $6.06 ¾. On the close last night, May 2023 CBOT soybeans closed at $14.74 ½; down 4 cents for the month of March; high for the month $15.38 ½; low for the month $14.05. July 2023 CBOT wheat closed last night at $7.04 ½; down 9 cents for the month of March; high for the month $7.35 ¼; low for the month $6.65.

In the weeks ahead, be especially careful when comparing corn and soybean basis levels of bids for April to May 2023 delivery. Numerous Ohio facilities are already using the July CBOT month for nearby corn bids. Even more are now using the July CBOT month for nearby soybean bids. The change can come at any point from the May 2023 CBOT to July 2023 CBOT. Note that for end users in the current arena, values can vary widely day to day, week to week, for corn and soybean bids for April to May 2023 delivery. When your local facility is now basing bids from the July 2023 CBOT, the new cash price is often less when accounting for the inverse that is taking place. Bottom line that scenario results in the basis weakening and getting wider, and you are now getting less for your corn and soybeans. Both corn and soybeans are in inverse relationships for corn and soybeans bids as the May is above July with often big fluctuations day to day. 

This week Cargill and Viterra announced they would not be exporting grain from Russian ports as of July 1. Little impact will take place with no major disruptions expected. The question remains, what price will the exported wheat bring? The last two weeks Russia has postulated they can’t sell the wheat too cheaply as they need adequate wheat supplies to provide flour for the masses. Yet, for months they have been the world’s price setter. Bottom line, Russia needs the taxes those facilities provides. Russian agriculture oligarchs will step in to buy those facilities. 

Wet and cool conditions in Ohio and the Midwest took place for much of March. Anticipate that trend to continue well into the third week of April. At this juncture, expect April U.S. corn planting progress to be slow. The Upper U.S. Plains could see 8 to 20 inches of snow into the first week of April. Corn planting progress will be especially slow in North and South Dakota as well as Minnesota.