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09

March USDA Supply & Demand

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Overall comments on this report are muted as the USDA made very few U.S. or world adjustments to the balance sheets. Some of the bearish attitudes may be lifted a bit without downward adjustments to corn or soybean exports. The only demand adjustment made is in U.S. soybean crush demand, revised 10 million bushels lower.

Looking over pre-report trade estimates, corn ending stocks were 27 million bushels below the average trade guess at 1.837 Billion bushels which is not changed from February. Soybean ending stocks came in right at the trade guess at 460 million bushels and wheat, just below the trade guess at 966 million bushels (Also no change from February).

Down in S. America, no changes were made to production estimates and all were right at pre-report trade guesses.

With little fanfare in this March report, the trade will look to the March 31st Prospective Plantings and March 1 Stocks In All Positions reports to influence prices.

Here's what the USDA had to say:

COARSE GRAINS: Projected U.S. feed grain ending stocks for 2015/16 are unchanged this month with only small offsetting increases for barley imports and exports and no changes to supply and use projections for the other feed grains. The projected season-average farm price ranges are narrowed 5 cents on each end for corn, sorghum, and barley, leaving the midpoints of the ranges unchanged on the month. The midpoint for the projected corn price remains $3.60 per bushel. The oats farm price range is projected 10 cents lower on the high end reducing the midpoint by 5 cents to $2.15 per bushel based on the latest reported prices.

Corn food, seed, and industrial use is lowered slightly for 2014/15 reflecting a 9-million-bushel reduction in estimated corn used in ethanol production based on revisions to monthly data reported in the March 1 Grain Crushings and Co-Products Production 2015 Summary. An offsetting change is made to 2014/15 feed and residual use as trade and ending stocks are known.

Global coarse grain supplies for 2015/16 are projected 1.6 million tons lower. Much of the decline reflects lower corn beginning stocks for Brazil with 2014/15 exports raised this month. Global 2015/16 coarse grain production is lowered with reductions for South Africa and Philippines corn and India millet more than offsetting an increase for Indonesia corn. Corn production is lowered 0.5 million tons for South Africa with a continuation of drought reducing area and yield prospects further. Philippines corn production and India millet production are each lowered 0.3 million tons on lower yields resulting from dryness. Indonesia corn production is raised 0.3 million tons with higher expected area reflecting both an increase to reported area for 2014/15 and indications that reduced rice planting will boost corn area in 2015/16.

Global coarse grain consumption for 2015/16 is raised 0.5 million tons with higher corn use for India and South Africa and increased barley feeding for China more than offsetting a reduction in corn use for Venezuela. Global 2015/16 coarse grain imports are raised. Corn imports are increased for South Africa, Philippines, and Mexico and barley imports are raised for China. Partly offsetting are small reductions in corn imports for Indonesia and Venezuela. Corn exports are raised for Indonesia and South Africa, with the increase for South Africa reflecting higher expected trade with neighboring countries where drought has also affected corn production. Global coarse grain ending stocks for 2015/16 are lowered with corn ending stocks down 1.8 million tons mostly reflecting smaller stocks in Brazil.

 

OILSEEDS: U.S. soybean production is projected at 3,929 million bushels, down slightly from last month due to a revision to South Carolina production. U.S. soybean ending stocks for 2015/16 are projected at 460 million bushels, up 10 million from last month due to a lower crush. Soybean trade projections are unchanged. Crush is reduced 10 million bushels to 1,870 million reflecting a lower projection for soybean meal domestic disappearance. Soybean meal imports are raised slightly, partly offsetting lower meal production. Despite a lower crush, soybean oil ending stocks for 2015/16 are projected up 120 million pounds from last month to 2,185 million as higher beginning stocks and a lower export forecast more than offset lower production. Higher beginning stocks reflect a revision to soybean oil stocks for 2014/15 as reported in the March 1 Oilseed Crushings 2015 Summary report.

Soybean and soybean meal prices are reduced this month and the projected ranges are narrowed. The U.S. season-average soybean price for 2015/16 is projected at $8.25 to $9.25 per bushel, down 5 cents at the midpoint. The soybean meal price is projected at $270 to $300 per short ton, down $5 at the midpoint. Soybean oil prices are projected at 28.5 to 31.5 cents pound, unchanged from last month.

Global oilseed production for 2015/16 is projected at 526.9 million tons, down fractionally from last month. Global soybean production is projected at 320.2 million tons, down slightly from last month. Other oilseed production changes include reduced rapeseed production for Australia, higher peanut production for India, lower palm kernel production for Malaysia, and lower cottonseed production for India and Pakistan.

Global oilseed trade for 2015/16 is projected at 149.3 million tons, up 1.2 million mainly reflecting increased soybean exports for Brazil. The soybean import forecast for China is raised reflecting strong imports to date. Partially offsetting are reduced imports for the EU, Pakistan, and Mexico, where more imports of soybean meal are expected. Global oilseed crush is projected higher reflecting larger soybean crush in Argentina and China. The forecasts for peanut crush in India and rapeseed crush in the EU are also projected higher. Reduced forecasts for cottonseed crush in India, Pakistan, and the United States are partly offsetting.

Argentina soybean meal exports are raised with a larger crush forecast. Soybean meal imports are increased for the EU, Pakistan, Mexico, and South Korea. Global oilseed ending stocks are projected at 89.5 million tons, down 1.7 million from last month, mostly due to lower soybean ending stock projections for Argentina and Brazil. Global vegetable oil production is nearly unchanged this month as higher soybean oil and peanut oil production more than offset lower palm oil production in Malaysia. Global vegetable oil stocks are projected at 16.5 million tons, down marginally from last month.

 

WHEAT: There are no changes to this month’s all wheat balance sheets. By class, Hard Red Winter wheat exports are raised 10 million bushels and Hard Red Spring wheat exports are lowered 10 million bushels.

Global 2015/16 wheat supplies are lowered 3.3 million tons primarily on decreased production. The largest production change is a 2.4-million-ton decrease for India on updated government statistics. Australia production is lowered 1.5 million tons reflecting the sharp reduction in harvested area by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES). The ABARES upward yield revision confirms USDA’s earlier analysis of weather data and satellite imagery. Partly offsetting is a 0.5-million-ton increase for EU production. Global 2015/16 wheat production remains a record. World trade is lowered 0.4 million tons led by a 1.0-million-ton reduction for Australia on the smaller crop. Russia exports are lowered 0.5 million tons on a slow pace and reduced competitiveness to EU origins. Partly offsetting is a 0.5-million-ton increase for Argentina reflecting a very strong shipment pace.

World wheat consumption for 2015/16 is lowered 2.0 million tons to 709.4 million. India consumption is lowered 1.0 million tons reflecting the smaller crop. Consumption in Egypt and Iraq are each lowered 0.4 million tons, and the Philippines is lowered 0.3 million tons. With supplies declining faster than total use, ending stocks are lowered 1.3 million tons but remain record large.

 

2015-16 USDA U.S. Grain Carryout (bln bu)
 
USDA Mar
2015-16
Average Trade Est.
Range of
Trade Est.
USDA Feb
2015-16
Corn
1.837
1.864
1.800-1.983
1.837
Soybeans
0.460
0.459
0.440-0.550
0.450
Wheat
0.966
0.973
0.920-0.998
0.966

 

2015-16 USDA World Grain Carryout (million tons)
 
USDA Mar
2015-16
Average Trade Est.
Range of
Trade Est.
USDA Feb
2015-16
Corn
206.97
209.05
206.50-210.50
208.81
Soybeans
78.87
80.82
79.00-82.40
80.42
Wheat
237.59
238.17
230.00-240.00
238.87

 

2015-16 South American Production (million tons)
 
USDA
Mar
2015-16
Average Trade Est.
Range of
Trade Est.
USDA
Feb
2015-16
ARG Corn
27.00
27.22
25.00-28.00
27.00
ARG Soy
58.50
58.98
56.90-61.00
58.50
BRZ Corn
84.00
84.30
81.00-87.00
84.00
BRZ Soy
100.00
100.17
98.60-102.00
100.00
 
Source: USDA, Reuters, Bloomberg
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These data and comments are provided for information purposes only and are not intended to be used for specific trading strategies. This commentary is written as a daily marketing tool to help farmers sell the grain they raise. Although all information is believed to be reliable, we cannot guarantee its accuracy or completeness. Past performance and testimonials are not necessarily indicative of future results. Commodity trading involves the risk of loss, and you should fully understand those risks before trading.