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10

April USDA Supply & Demand

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U.S. soybean ending stocks declined 5 million bushels from last month to 550 million bushels, well below trade expectations looking for a 19 million bushel increase in stocks. The decline came from a 10 million bushel increase in soybean crush that was partially offset by reductions in seed & residual use.

World soybean ending stocks were reported at 90.80 million tons vs. 94.40 last month and trade expectations of 92.95 million tons. The reduction in stocks came from a larger than expected cut in Argentine soybean production, which was reduced 7 million tons from last month and below even the lowest trade estimate. This is the lowest Argentina soybean production number since 2011/12.

 

U.S. corn ending stocks increased 55 million bushels from last month, slightly less than the average trade guess but well within the range of expectations. The increase came from a 50 million bushel cut in feed & residual and a 5 million bushel cut in food, seed, and industrial use.

World corn ending stocks decreased 1.39 million tons, coming in at 197.78 vs. trade expectations of 197.29. Cuts in both Argentine (down 3 million tons) and Brazilian (down 2.5 million tons) corn production estimates was the primary driver in the world carryout getting smaller.

 

U.S. wheat ending stocks came in at 1.064 billion bushels, 30 million bushels larger than last month and 28 million bushels larger than the average trade guess. The increase in stocks came from a 30 million bushel reduction in feed use.

World wheat stocks climbed 2.33 million tons to 271.22 vs. trade expectations for a reduction to 268.16 million tons. Larger wheat stocks in the U.S., the Middle East, and North Africa were the main contributors to the increase in world supplies.

 

The USDA report was supportive to beans, neutral corn, and neutral to slightly bearish wheat. World soybean fundamentals continue to tighten even as the U.S. is expected to plant a large number of acres (many expect the March intentions number to get bigger by June). The lack of bearish corn news should keep the current rally alive as planting conditions remain less than ideal and smaller acres require a big yield number just to maintain surpluses into next year. Wheat traders will likely shrug off the bearish report as poor winter wheat conditions and persistent drought in the Plains dominate headlines.

 

2017-18 USDA U.S. Grain Carryout (bln bu)
 
USDA April
2017-18
Average Trade Est.
Range of
Trade Est.
USDA Mar
2017-18
Corn
2.182
2.189
2.067-2.265
2.127
Soybeans
0.550
0.574
0.545-0.625
0.555
Wheat
1.064
1.036
0.989-1.060
1.034

 

2017-18 USDA World Grain Carryout (million tons)
 
USDA April
2017-18
Average Trade Est.
Range of
Trade Est.
USDA Mar
2017-18
Corn
197.78
197.29
191.50-202.00
199.17
Soybeans
90.80
92.95
91.00-96.00
94.40
Wheat
271.22
268.16
266.50-270.00
268.89

 

2017-18 South American Production (million tons)
 
USDA April
2017-18
Average Trade Est.
Range of
Trade Est.
USDA Mar
2017-18
ARG Corn
33.00
33.74
32.00-36.00
36.00
ARG Soy
40.00
42.66
40.50-46.00
47.00
BRZ Corn
92.00
92.71
86.50-96.00
94.50
BRZ Soy
115.00
115.25
113.30-117.00
113.00

 

 Source: USDA

 

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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.