May 25, 2017

May 2017 USDA Supply & Demand Report

  Summary:

US Ending Stocks (16/17 in million bushels)
USDA April 17 Avg Estimate USDA May 17
Corn 2,320 2,326 2,295
Soybeans 445 438 435
Wheat 1,159 1,162 1,159
US Ending Stocks (17/18 in million bushels)
Corn -- 2,122 2,110
Soybeans -- 563 480
Wheat -- 934 914

Video Commentary

Full S/D Breakdowns

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 May WASDE typically holds only moderate changes to old crop US demand and ending stocks. What makes this one exciting is we see USDA’s first official balance sheets for new crop.

For the new crop production numbers USDA uses the March 31 Prospective Planting numbers and applies an average percent harvested as well as trend yields. Historically, USDA has occasionally lowered trend yield due to very late plantings. USDA left their new crop trend yield numbers unchanged from their February outlook conference.

Corn: Old crop ending stocks were revised down from 2.320 billion bushels to 2.295 (trade est 2.326). The 25 million bushel decline was seen in industrial use, non-ethanol industrial use. For new crop USDA estimated 14.065 billion, a sharp fall from last year’s record 15.148. Again, that used trend yield and no change in acres from the March survey. That is reasonable in our opinion for this time of year. Despite the sharp drop in production for new crop, we have to deal with a larger carry-in stock situation than last year. That keeps the new crop balance sheet from looking outright bullish. New crop estimates were estimated at 2.110 (trade est 2.122). The US side of things would be considered slightly supportive.

World Numbers: Increases for South American corn production, for the current old crop harvest, totaled 4.0 million tonnes over last month. That pushed world corn stocks for the old crop year from 223.0 million tonnes to 223.9. A good drop in US corn production, a minor drop in Chinese corn stocks, and an increase in Chinese corn demand all helped to post only 195.3 million tonnes for new crop stocks. That will be considered moderate bullish.

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