June 19, 2018

April 2017 Supply & Demand Report


US Ending Stocks (16/17 in million bushels)
USDA March 17 Avg Estimate USDA April 17
Corn 2,320 2,352 2,320
Soybeans 435 447 445
Wheat 1,129 1,147 1,159

Video Commentary:

USDA's monthly supply/demand report was not bearish for corn. USDA left their old crop ending stock unchanged from the previous month at 2.320. The trade was expecting a moderate increase. The stocks to use computations was left at 15.9%. With stable numbers for old crop the market is a little more prepared to take a clear look at new crop. At this time the only question for new crop is the size of tightening of supply you are looking at. USDA is using an aggressive (larger) starting yield than Allendale. As noted in our AgLeaders Conference series, this next leg down in pricing after harvest may be the low for a good year or two.

USDA left old crop US ending stocks unchanged at 2.320 billion. They dropped feed/residual by 50 million bushels. Lower feed/residual use was expected. That was exactly offset with a 50 million increase in corn for ethanol. World corn stocks rose from 220.7 million tonnes to 223.0. Brazil's production was raised from 91.5 mt to a 93.5 level. Argentina's production was raised from 37.5 to now 38.5.

USDA raised the US soybean stock estimate about as expected, from 435 million last month to 447. A 9 million increase was noted for seed use while a 19 million decrease was seen for residual. The market is taking the changes on the world side pretty well. World stocks were raised from 82.8 million tonnes to 87.4. That was made with help from a higher Brazil production estimate, from 108 to 11 mt, and a minor increase for Argentina. The trade is quite happy to see USDA move right inline with the general trade expectation instead of stair-stepping over two or three months and dragging out the suspense.

USDA raised its US wheat stock number as expected, from 1.129 billion bushels to now 1.159. This was made from a 35 million bushel cut to feed/residual and a small change to the import forecast. World wheat stocks were raised from 249.9 million tonnes to 252.2.


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