The much anticipated US Department of Agriculture World Agricultural Supply and Demand estimates took on a bullish tone, especially for corn.
In Friday’s WASDE report, the US Department of Agriculture slashed corn yield estimates by 3.8 bushels to 179.3 bushels per acre. The average pre-report trade estimate was 182.7 bushels an acre, indicating global supplies may not be as burdensome as once thought.
Rhett Montgomery, a lead market analyst with DTN, says U.S. ending stocks decreased to approximately 1.54 billion bushels on sharply lower production. He says the world ending stock number is “the lowest in 12 years”, which is supportive for the U.S. market as it positions the States as a supplier of grain “to those that need it.”
Montgomery says the soybean projections are neutral to slightly bullish after the USDA lowered average yields by 0.9 bushels to 50.7 bushels per acre. There were declines in several key soybean growing states, including Indiana, Kansas, South Dakota, Illinois, Iowa and Ohio.
He explained the neutral soybean projection pertains to international factors and the slightly bullish projection is based on a positive domestic outlook for crush.
“The neutral side to that, or the negative side, is that South American production is still record large despite the weather issues not being seen right now as being a huge issue towards soybean production. If you include China, the world ending stocks are a record and it’s by a healthy margin — it’s by 20 million metric tonnes or something — so it’s a mixed bag on soybeans but I think slightly bullish overall.” Montgomery said.
The new USDA outlook for wheat noted slightly larger supplies and domestic use and marginally higher ending stocks. US Winter wheat area is up only slightly.
“Overall, it’s a little early to gauge the new crop a bit just on the seeding alone; the crop conditions are worrisome to begin with but obviously that can change depending on what the rain patterns look like in March and April when that crop is coming out of dormancy.” he said.
(CJWW)
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