October 22, 2018



US Ending Stocks (17/18 in million bushels)
USDA Nov 17 Avg Estimate USDA Dec 17
Corn 2,487 2,478 2,437
Soybeans 425 438 445
Wheat 935 938 960


Each month USDA updates various estimates of supply and demand and revises its moving target for where stocks will end at the end of the marketing year, August 31 for corn and soybeans and May 31 for wheat. The December report typically holds no changes to US production. Only minor changes are made to US demand and to the world numbers. The bid deal won’t be seen until January 12 when USDA issues four separate reports. Three cover old crop numbers (Annual Production Summary, quarterly Grain Stocks, monthly supply/demand) and the Winter Wheat Seedings report holds the first new crop 2018/19 numbers.

Corn: The 2017/18 crop year changes were relatively minor. USDA lowered its ending stock forecast from 2.487 billion bushels in November to 2.437. That was better than the 2.478 trade expectation. The only change made was a 50 million bushel increase in corn for ethanol. We fully support this move. It was a little surprising that USDA did not lower exports. Their current 1.925 billion bushel expectation is 10% over the five year average. Current year to date sales are 7% over. We are a little behind where we should be.

World Numbers: The new crop changes were relatively minor, from 203.9 last month to 204.1 this month. Lower US numbers were offset with slightly higher EU and Former Soviet Union production and exports. USDA did not change any of their South American estimates.

Price Expectations: USDA’s corn price forecast was left unchanged at $3.20 from last month. This is a cash corn estimate for Central Illinois that is weighted according to marketing patterns. Current bids in that location yesterday were at $3.17 1/2. Current stocks to use numbers, just tightened from 17.2% last month to now 16.8%, would imply around $3.40 nearby futures.

Soybeans: USDA’s 2017/18 ending stock forecast was raised from 425 million bushels last month to 445. The trade was expecting 438. Ending stocks were lowered by 25 million bushels to 2.225 billion. That is still a bit large at 2% over last year’s record. Year to date export sales are 13% under last year. This was partially offset with a 5 million increase for the minor seed category.

World Numbers: New crop stocks were raised from 97.9 million tonnes to 98.3. Larger US numbers were noted. In addition, both Brazilian and Argentine exports were raised by 0.5 mt each. No changes to their production estimates were made.

Price Expectations: No changes were made to USDA’s Central Illinois price projection. Weighted according to seasonal marketing patterns from September 1 – August 31, they see a $9.30 cash price. Bids yesterday for that location were at $9.47. Current stocks to use numbers, at 10.3%, would $9.60 nearby futures.

Wheat: Ending stock estimates, for the 2017/18 crop year that ends on May 31, were raised from 935 million to 960. The trade expectation was 938. USDA’s new export estimate, at 975 million bushels, is even with the five year average. Current sales are 4% under the five year average so there may be another small cut in the months ahead. USDA highlighted a higher Canadian wheat crop, and its impact on the US, for the move.

World Numbers: World stocks were raised from 267.5 million tonnes to 268.4. Higher US stocks were noted. In addition, a 3 million tonne increase was noted for Canada’s crop (30.0 mt). Higher exports were noted for Canada as well as the Former Soviet Union nations.

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