Not much excitement in March 8 USDA numbers

By Doug Tenney, Leist Mercantile

Report highlights: U.S. corn exports and ethanol unchanged. U.S. soybean exports and crush unchanged. Brazil soybean production down just 1 million tons.

Trade expectations: U.S. soybean exports to decline, U.S. corn for ethanol to increase. Brazil soybean and corn production to decline.    

Following the noon USDA report release, corn down 1 cent, soybeans down 2 cents, and wheat up 6 cents. Just before the report was released, corn down 3 cents, soybeans down 6 cents, and wheat up 7 cents.

U.S. 2023-2024 ending stocks: corn 2.172 billion bushels, last month 2.172 billion bushels; soybeans 315 million bushels, last month 315 million bushels; and wheat 673 million bushels, last month 658 million bushels. 

USDA this month estimates Brazil soybean production at 155 million tons, last month was 156 million tons. Brazil corn production was estimated at 124 million tons, last month was 124 million tons. Argentina soybean production was 50 million tons, last month was 50 million tons.

Argentina corn production was estimated at 56 million tons, last month was 55 million tons.

In this month and coming months, look for USDA to lower the Brazil soybean production in multiple steps. This month, traders were looking for the Brazil soybean production to drop almost 4 million tons. A decline of 3-4 million from last month’s 156 million tons is reasonable. Already, private estimates have suggested the Brazil soybean production at 142-149 million tons due to the numerous weeks of too much rain the south, while dry in the central and northern regions of Brazil.

Trader estimates for 2023-2024 U.S. ending stocks: corn 2.159 billion bushels; soybeans 319 million bushels; and wheat 657 million bushels. Trader estimates for Brazil soybean production was 152.28 million tons and their estimate for Brazil corn production was 121.95 million tons. 

U.S. soybean exports have been disappointing for successive months. U.S. soybean exports to date are 1.254 billion bushels. Last year exports were 1.569 billion bushels, a decline of 20%. Corn exports to date are 811.9 million bushels. Last year was 603.5 million bushels, an increase of 34%. 

There was major disappointment last week at the Commodity Classic in Houston. The agricultural community had been expecting one of the sessions at the annual event to detail that ethanol from corn would be approved for use as sustainable aviation fuel or SAF. After all, the Secretary for Agriculture, Tom Vilsak, along with EPA Administrator, Michael Regan, were speakers that day. It was the perfect venue to generate the maximum amount of good news for the entire year on one single day. Instead, it was a busted balloon with that announcement not taking place. Numerous attendees displayed their extreme disappointment by exiting that session. EPA has announced that a determination would be forthcoming in weeks, not months. Time will tell. 

Grain prices have taken a major hit since the Dec. 8 Supply and Demand report, or WASDE. That day, May 2024 CBOT corn was $4.975, down 2 cents, May 2024 soybeans were $13.3725, down 7 cents, and May 2024 CBOT wheat was $6.405, down 9 cents. Corn and soybean prices fell precipitously into January and February as May CBOT corn reached a bottom on February 26 at $4.0875. Yesterday, May CBOT corn closed at $4.38, up 9.25 cents for the day. So far, corn in less than 2 weeks has seen a rally of 30 cents. May CBOT reached its recent low on February 29 at $11.285. Yesterday, May CBOT soybeans closed at $11.6625, up 18 cents. May CBOT wheat is still searching for its bottom as it has made multiple new contract lows in the past 10 days.

Yesterday, corn, soybeans and soyoil prices were above their respective 20-day moving averages. It marks the first time since December that event has taken place. In recent days, some have suggested the contract lows of last week for corn and soybeans indicate that those lows have finally fully discounted the bearish grain fundamentals. 

Earlier this month, USDA announced the crop insurance prices with corn at $4.66 and soybeans at $11.55. Last year, the corn price was $5.91 and soybeans were $13.76. Crop insurance per acre premiums are down 15-20% compared to last year due to lower commodity prices. Producers have one week to make any changes with the deadline fast approaching on March 15. Do yourself and your crop insurance agent a favor by not waiting until the afternoon of March 15 to make any final changes. 

In the coming weeks, producers have a major decision to make that they are dreading due to the declining prices since the fall harvest. Many are holding unsold grain on the farm in much larger proportions than in recent years. Will they empty corn bins by early April so they don’t have to worry about its quality in the rapidly approaching spring and summer months? 

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