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11

April USDA Supply & Demand

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COARSE GRAINS:  Today's USDA report pegged U.S. corn ending stocks unchanged after a 50 million bushel reduction in feed but a 50 million bushel increase in ethanol.  This accounts for the higher than expected stocks adjusted seen on the March 31st stocks report.  The figures also include a favorable adjustment for ethanol that continues to run ahead of the year end target held by the USDA.  The season-average corn price received by producers is unchanged at the midpoint with the range narrowed to $3.25 to $3.55 per bushel.  The trade was looking for a higher ending stocks number at 2.345 billion bushels, leaving futures in a neutral to slightly bearish set up for the closing 2 hours of trade. 

 

Over on the world corn side, Brazil's record corn crop is expected to top 93.5 million tons.  The estimate was 1 million tons larger than trades estimated for Brazil.  Global ending stocks were pegged at 222.98 million tons, .8 million tons higher than expected. Brazil corn production was raised primarily on larger projected second crop area.  Argentina corn production increased 1 million tons on the latest harvest results indicating better-than-expected yields.  Other major corn production changes include increases for Mexico, Indonesia, Pakistan and South Africa, with reductions for Paraguay, Ecuador and Russia.

 

OILSEEDS:  The USDA report pegged S. American soybean supply higher than expected by 1 million tons although Argentine/Brazil production was adjusted 3.5 million tons from March.  The season-average soybean price is lowered 5 cents at the midpoint to $9.55 per bushel based on marketings to date and lower expected prices for the second half of the marketing year.  Soybean meal prices are projected at $310 to $330 per short ton, down $5.00 at the midpoint.  Today's report should be taken as bearish although prices largely factored in large S. American crops.  Futures prices remain in extended buy signals but should stabilize ahead of the U.S. growing season. 

 

WHEAT:  The USDA April report pegged U.S. wheat ending stocks for 2016/17,  30 million bushels higher on lower feed and residual use which more than offsets a slight import reduction.  At 1,159 million bushels, ending stocks are projected to reach a near 30-year high.  Feed and residual use is lowered 35 million bushels to 190 million which reflects lower-than-expected disappearance for the December-February and September-November quarters, as indicated by March 1 and revised December 1 stocks from the March 31 Grain Stocks report.  The import change is based on the pace to date with reductions for soft red winter and durum. 

 

Global 2016/17 wheat supplies were raised 1.7 million tons due to higher projected beginning stocks and a 0.3-million-ton increase in production.  World stocks came in at 252.26 million tons vs. a trade guess of 250.60 million tons.  Futures prices are trading neutral as prices remain oversold and largely factored in today's adjustments.   

 

Crop markets will largely discount today's report in lieu of pending U.S. planting while corn futures have held recent lows. 

 

 

2016-17 USDA U.S. Grain Carryout (bln bu)
 
USDA April
2016-17
Average Trade Est.
Range of
Trade Est.
USDA Mar
2016-17
Corn
2.320
2.345
2.270-2.484
2.320
Soybeans
0.445
0.447
0.425-0.471
0.435
Wheat
1.159
1.152
1.125-1.200
1.129

 

2016-17 USDA World Grain Carryout (million tons)
 
USDA
April
2016-17
Average Trade Est.
Range of
Trade Est.
USDA
Mar
2016-17
Corn
222.98
222.1
219.6-225.2
220.7
Soybeans
87.41
84.2
83.2-85.8
82.8
Wheat
252.26
250.6
249.0-253.0
249.9

 

2016-17 South American Production (million tons)
 
USDA
April
2016-17
Average Trade Est.
Range of
Trade Est.
USDA
Mar
2016-17
ARG Corn
38.5
37.8
37.2-39.0
37.5
ARG Soy
56.0
56.0
55.0-57.0
55.5
BRZ Corn
93.5
92.5
91.0-94.0
91.5
BRZ Soy
111.0
110.0
109.0-111.6
108.0





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These data and comments are provided for information purposes only and are not intended to be used for specific trading strategies. This commentary is written as a daily marketing tool to help farmers sell the grain they raise. Although all information is believed to be reliable, we cannot guarantee its accuracy or completeness. Past performance and testimonials are not necessarily indicative of future results. Commodity trading involves the risk of loss, and you should fully understand those risks before trading.