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08

February USDA Supply & Demand and Quarterly Grain Stocks

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The USDA “data-dump” turned out to be a ho-hum event for the markets. Even where estimates got smaller the numbers are still large enough that traders remain reluctant to buy. The lack of a U.S./China trade deal is looming over the grain complex.

U.S. corn production was down 206 million bushels from the November report on a 1.9 bushel per acre reduction in yield and a slight reduction in harvested acres. Ending stocks were down just 73 million bushels however as the USDA reduced imports, feed, residual, and ethanol use.

U.S. soybean production was reduction 56 million bushels from November’s estimates on a 200,000 acre reduction in harvested area and a 0.5 bushel lower national yield estimate. Ending stocks are projected 45 million bushels smaller than November as the decrease in production was partially offset by a 25 million bushel decrease in exports and a small adjustment in residual.

U.S. wheat production was left unchanged. Wheat ending stocks are projected 36 million bushels above November’s  estimate largely on a 30 million bushel reduction in feed and residual use.

 
2018-19 USDA U.S. Harvest Acres (million acres)
 
USDA Feb
2018-19
Average Trade Est.
Range of
Trade Est.
USDA Nov
2018-19
Corn
81.740
81.380
80.85-82.10
81.767
Soybeans
88.110
88.187
87.36-88.51
88.343
Wheat
39.605
 
 
39.6

2018-19 USDA U.S. Yield (bu/acre)
 
USDA Feb
2018-19
Average Trade Est.
Range of
Trade Est.
USDA Nov
2018-19
Corn
176.4
177.9
176.7-179.9
178.9
Soybeans
51.6
51.8
51.0-52.4
52.1
Wheat
47.6
 
 
47.6

2018-19 USDA U.S. Production (bln bu)
 
USDA Feb
2018-19
Average Trade Est.
Range of
Trade Est.
USDA Nov
2018-19
Corn
14.420
14.532
14.340-14.760
14.626
Soybeans
4.544
4.569
4.490-4.620
4.600
Wheat
1.884
 
 
1.884

2018-19 USDA U.S. Grain Carryout (bln bu)
 
USDA Feb
2018-19
Average Trade Est.
Range of
Trade Est.
USDA Dec
2018-19
Corn
1.735
1.708
1.621-1.787
1.781
Soybeans
0.910
0.926
0.800-1.015
0.955
Wheat
1.010
0.989
0.950-1.028
0.974

World corn ending stocks were reduced 1.82 million tons to 309.78 million tons, but came in above the average trade guess looking for 307.06.

World soybean ending stocks were down a whopping 8.61 million tons from November to 106.72, below the average trade guess of 112.67. The big adjustment in world bean supplies comes largely from a 9.62 million ton adjustment to Argentina’s 17-18 bean ending stocks.

World wheat ending stocks were reduced 1.97 million tons from November to 267.53, slightly below the trade guess of 268.09.

 

2018-19 USDA World Grain Carryout (million tons)
 
USDA Feb
2018-19
Average Trade Est.
Range of
Trade Est.
USDA Dec
2018-19
Corn
309.78
307.06
305.0-308.9
308.80
Soybeans
106.72
112.67
109.0-115.1
115.33
Wheat
267.53
268.09
266.0-269.7
268.10

 

The delayed-release of U.S. quarterly grain stocks held few surprises for traders. Corn stocks in all positions as of Dec 1, 2018 came in at 11.952 billion bushels just shy of the average trade guess calling for 12.092 billion bushels. Bean stocks were reported at 3.736 billion bushels vs. the average trade guess of 3.743 billion. Wheat stocks held in all positions were larger than trade expectations, coming in at 1.999 billion bushels vs. the average trade guess of 1.851 billion bushels.


U.S. Quarterly Grain Stocks (bln bu)
 
USDA
Feb 2019
Average Trade Est.
Range of
Trade Est.
USDA
Jan 2018
Corn
11.952
12.092
11.940-12.400
12.567
Soybeans
3.736
3.179
3.414-3.872
3.161
Wheat
1.999
1.851
1.846-2.003
1.873

 

Winter wheat seedings for 2019-20 were smaller than expected across the board. All winter wheat seedings came in at 31.290 million acres, lower than the lowest analyst estimate.  HRW wheat seedings were estimated at 22.2 million acres vs. the trade guess of 22.579. SRW wheat seedings came in at 5.660 vs. the 5.963 trade guess. White wheat seedings were reported at 3.440 vs. 3.488 average trade guess.


2019-20 U.S. Winter Wheat Seedings (mln acres)
 
USDA
Jan 2019-20
Average Trade Est.
Range of
Trade Est.
USDA
2018-19
All Winter
31.290
32.218
31.500-33.300
32.535
HRW
22.200
22.579
22.925-23.620
22.923
SRW
5.660
5.963
5.643-6.200
6.076
White
3.440
3.488
3.211-3.700
3.536

2018-19 USDA South American Production (million tons)
 
USDA
Feb 2019
Average Trade Est.
Range of
Trade Est.
USDA
Dec 2018
ARG Corn
46.00
43.09
41.5-45.0
42.5
ARG Soy
55.00
55.14
54.0-56.0
55.5
BRZ Corn
94.50
93.41
91.0-95.5
94.5
BRZ Soy
117.00
116.99
115.0-119.0
122.0


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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.