- The USDA’s April WASDE report was generally neutral for the Ag markets with no major surprises found in either the US or the world balance sheets. Corn and soybeans had spent the morning trading around unchanged, and prices turned positive following the report. Chicago wheat futures had spent the morning trading in the red, but have managed to pare back losses following the report release. Statistically, there were no major surprises for either the bulls or the bears to grab hold of.
- The USDA raised the US corn end stocks by 200 million bu to 2,035 million bu. The increase in stocks was a result of a 75 million bu decline in feed/residual use to 5,300 million bu, and a 75 million bu cut in the amount of corn to be exported in the year ahead. Corn used for ethanol production was also cut by 50 million bu to 5,500 million based on the most recent monthly data from NASS and weekly production figures produced by the EIA. Despite the lower usage rates and rising ending stocks figure, the midpoint for the USDA’s season average price forecast was unchanged from March at $3.55/bu.
- 2018/19 world corn production was increased by 6 million mt with a 1 million increase in Argentine production to 47 million mt, and a 1.5 million mt increase in Brazil to 96 million mt. Brazil’s crop forecasting agency CONAB will weigh in with their crop report to be released on Thursday. 2018/19 world corn ending stocks were forecast at 314 million mt, up 5.5 million from March, but still 26 million mt less than last year. No changes were made to the Chinese corn balance sheet, with imports held at 5 million mt and ending stocks a 204.8 million mt. Note that 64% of the world’s corn stockpile is held captive within China. The world corn balance sheet remains supportive for corn prices on breaks, though traders will be looking forward to the May WASDE which will offer the USDA’s first official estimate of the 2019/20 world corn estimates.
- US 2018/19 wheat end stocks were raised 32 million bu to 1,087 million. The US wheat export outlook was lowered by 20 million bu to 945 million, while feed and residual use was lowered by 10 million bu to 70 million. This is still an historically low US feed/residual rate as more corn is utilised in US livestock feed rations. We disagree with the cut in US wheat export, and we expect that the USDA is still overestimating US wheat stocks.
- World 2018/19 wheat stocks were raised 5.6 million mt to 275.6 million. Half of that increase was due to revisions of the old crop carry in. The USDA raised 2017/18 ending stocks in N Africa, the Middle East, FSU-12, and Russia.
- The USDA lowered their estimate of 2018/19 US soybean end stocks by 5 million bu to 895 million bu, with a 3 million bu decline in imports to 17 million and a 2 million bu increase in seed use to 98 million. The USDA did not make any changes to their crush, export, or residual use estimates. The season-average farm gate price was narrowed, but the midpoint of the forecast was unchanged at $8.60/bu versus $9.33 a year ago. The USDA increased the estimate for soyoil use in biodiesel by 150 million lbs to 8,350 million. The stronger domestic use was nearly countered by a 100 million lbs increase in soyoil imports.
- 2018/19 world soybean production was increased fractionally to 360.6 million mt. The USDA left the Argentine soybean crop unchanged at 55 million mt ( up 17 million from last year), while the estimate for Brazilian soybean production was increased by 500,000 mt to 117 million mt versus 122 million mt last year. The USDA did not make any changes to Chinese soy estimates. 2018/19 soybean imports were held unchanged at 88 million mt (94.1 million mt in 2017/18), while China’s soybean crush estimate was steady at 88 million mt (90 million a year ago).
- The USDA’s April WASDE report did not offer much new information for Ag grain traders. S American corn production will be up 29 million mt from last year, and soybean production will increase 13.4 million mt, but similar figures have been in the market for months. We expect Chicago market’s focus to turn back to record large fund short positions, China trade negotiations, and spring weather across the Cornbelt. This week’s blizzard across the N Plains and Midwest is a concern.