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July USDA Supply & Demand

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Corn
The USDA supply/demand July update for corn we consider mostly bullish vs. the trade guesses. Old crop ending stocks came 100 million bushels lower than expected at 1.701 Billion bushels driven by higher exports. New crop ending stocks were pegged at 2.081 Billion bushels vs a trade expectation of 2.205 Billion bushels, taken as bullish partly on a smaller carry in number.

S. American crops continued smaller with the USDA adopting a sizable cut in Brazil corn production similar to Brazil's own Conab last week, adjusting their corn production 7.5 million tons lower. World ending stocks for 2015/16 came in at 206.90 million tons vs. trade expectations at 205.67 million tons (206.45 million last month).

World ending stocks for 2016/17 came in at 208.4 million tons from trade expectations at 205.56 million tons. With U.S. stocks tighter than expected due to upward adjustments in exports and as expected smaller Brazil crop, futures prices are moving higher after discounting a large crop ahead of this report already.

Soybeans
The USDA supply/demand update for soybeans we considered neutral against trade expectations. Old crop ending stocks came in at 350 million bushels vs a trade guess of 352 million bushels and 370 million bushels last month. The range was 280 to 420 million bushels. New crop ending stocks were reported at 290 million bushels vs trade expectations at 287 million bushels. World ending stocks for 2015/16 came in at 72.17 million tons vs trade expectations at 71.53 million tons and 72.3 million last month.

For world bean ending stocks, 2016/17 were pegged at 67.10 million tons vs a trade expectation of 67.01 million tons and 66.31 million bushels last month. Overall the report news should be taken as neutral but supportive for corn with the weather looking to bring some degree of threat for next week. We remain optimistic bean prices with strong support in November soybeans near the $10.50 area.

Wheat
The USDA supply/demand and crop production updates for wheat were bullish for world stocks which Chicago Board of trade prices floated slightly higher post report. U.S. ending stocks came in at 1.105 billion bushels from trade expectations for 1.107 billion bushels. Last month was 1.050 billion.

World ending stocks for 2015/16 were reported at 244.5 million tons compared to a trade expectation of 242.9 million tons. New crop 2016/17 ending stocks were pegged at 253.7 million tons from trade expectations for a record 258.8 million tons. Overall production increased 9.2 million tons but was more than offset by large increases in Chinese feed demand (5.5 million tons) EU feed up 1.5 million tons and slightly higher world export demand, up 1.5 million tons. Total demand was increased 13.34 million tons!

All US wheat production came in at 2.261 Billion bushels from a trade guess of 2.159 billion bushels and from 2.077 billion last month. Yields were record high at 53.9 bushels per acre with 11 states recording new highs. Winter wheat production came in at 1.63 billion bushels from trade expectations near 1.543 billion bushels. Our first spring wheat production estimate of the year came in at 550 million bushels from expectations close to 550 million bushels.



2015-16 USDA U.S. Grain Carryout (bln bu)
 
USDA July
2015-16
Average Trade Est.
Range of
Trade Est.
USDA June
2015-16
Corn
1.701
1.805
1.708-1.907
1.708
Soybeans
0.350
0.350
0.280-0.420
0.370
Wheat
0.981
 
 
0.980

 

2015-16 USDA South American Production (million tons)
 
USDA July
2015-16
Average Trade Est.
Range of
Trade Est.
USDA June
2015-16
ARG Corn
28.00
27.14
27.00-28.00
27.00
ARG Soy
56.50
56.32
55.00-57.00
56.50
BRZ Corn
70.00
73.90
69.10-77.50
77.50
BRZ Soy
96.50
96.39
95.50-97.00
97.00

 

2015-16 USDA World Grain Carryout (million tons)
 
USDA
July
2015-16
Average Trade Est.
Range of
Trade Est.
USDA
June
2015-16
Corn
206.90 
205.67
197.41-210.15
206.45
Soybeans
72.17
71.53
65.50-73.20
72.29
Wheat
244.52
242.98
242.30-244.00
243.01

 

2016-17 USDA U.S. Yield (bu/acre)
 
USDA July
2016-17
Average Trade Est.
Range of
Trade Est.
USDA June
2016-17
Corn
168.0
168.0
167.0-168.5
168.0
Soybeans
46.7
46.7
46.4-46.7
46.7
Wheat
51.3 
 
 
48.6

 

2016-17 USDA U.S. Production (bln bu)
 
USDA July
2016-17
Average Trade Est.
Range of
Trade Est.
USDA June
2016-17
Corn
  14.540  
14.521
14.430-14.550
14.430
Soybeans
3.880
3.867
3.800-3.895
3.800
Wheat
2.261
 2.159
 2.070-2.270
2.077

 

2016-17 USDA U.S. Grain Carryout (bln bu)
 
USDA July
2016-17
Average Trade Est.
Range of
Trade Est.
USDA June
2016-17
Corn
2.081
2.208
1.969-2.408
2.008
Soybeans
 0.290
0.287
0.170-0.360
0.260
Wheat
1.105
1.107
1.017-1.231
1.050

 

2016-17 USDA World Grain Carryout (million tons)
 
USDA July
2016-17
Average Trade Est.
Range of
Trade Est.
USDA June
2016-17
Corn
 208.39
205.56
197.00-213.70
205.12
Soybeans
 67.10
67.01
63.30-73.70
66.31
Wheat
 253.70
258.82
255.00-263.40
257.84

 

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.