June 19, 2018

March 2018 USDA Supply and Demand Report

Summary:

US Ending Stocks (17/18 in million bushels)
USDA Feb 18 Avg Estimate USDA Mar 18
Corn 2,352 2,312 2,127
Soybeans 530 530 555
Wheat 1,181 1,015 1,034

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 March report typically holds only minor changes to the US balance sheet and moderate changes to the world numbers due to South American production adjustments. The next major reports will be the annual Prospective Plantings and quarterly Grain Stocks on the 29th. USDA will not add new crop numbers on this report until May.

Corn: USDA lowered its ending stock forecast from 2.352 billion bushels to now 2.127. Analysts had expected 2.312. Exports were sharply raised by 175 million bushels. Over the past two months they have added 300 million to exports. A much larger than expected export number was also joined by a 50 million bushel increase in corn for ethanol.

World Numbers: World stocks were lowered from 203.1 million tonnes last month to 199.2. USDA cut Argentina by 3 million tonnes to now 36. They lowered the Brazilian crop slightly, from 95.0 to 94.5 mt. There may be further to go on that one. The trade estimate was 92 mt. Brazil’s Conab is now using 87.3. USDA’s non-US export number was lowered by 2.5 million tonnes (98 million bushels). USDA’s increase for domestic corn exports was much larger than that.

Soybeans: Ending stocks were increased from 530 million bushels last month to 555.  Analysts were expecting no change at 530. They were careful with their numbers today. Exports were lowered by 35 million bushels. Traders were not sure if that would be seen today after the very strong weekly export sales number this morning. Domestic crush was raised by 10 million bushels despite the fact we are behind in meeting their February number.

World Numbers: New crop stocks have been lowered from 98.1 to 94.4 million tonnes. Argentina was lowered from 54 million tonnes to 47 for production. There may be another month ahead with lower numbers but this was good for USDA for one month. Brazil’s crop was raised from 112.0 to 113.0. We expect another increase for Brazil. The pre-report trade estimates were 48.4 for Argentina and 113.8 for Brazil.

Wheat: Ending stocks were raised again this month. This time the increase was from 1.009 billion bushels to 1.034. The trade estimate was 1.015. The only change on the balance sheet was a 25 million drop for exports.

World Numbers: World stocks were raised from 266.1 million tonnes to 268.9. No production changes were noted to competitors. USDA’s export forecast for competing countries was lowered by 1 million tonne.


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