7 February February 2024 USDA Supply & Demand February 7, 2024 By John Roach USDA Supply/Demand 0 The February USDA reports released Thursday was expected to be largely neutral, and the futures market’s immediate reaction appeared to confirm the predictions. The ripple effect of the USDA’s bearish forecast on Brazilian soybeans in comparison to Conab’s more-aggressive cuts left futures stuck in place for a while as analysts weighed the ripple effect on U.S. exports and ending stocks. Wheat futures quickly lost a dime or more while corn was little changed as well at midday. Corn: U.S. ending stocks were increased to 2.172 billion bushels (bbu) based on lower domestic use while global production was reduced on declines in Brazil and Mexico. Foreign The average price projection was unchanged at $4.80 per bushel. Soybeans: Slower exports cut the export forecast for the year by 35 MMT from January, leading to a new total of 1.72 bbu. Ending stocks were raised to 315 million bushels as the crush forecast remained unchanged, trimming the average price to $12.65 per bushel. Wheat: U.S. wheat supplies for 2023-24 were projected at stable with exports little changed at 725 mbu. Ending stocks were raised to 658 mbu with prices unchanged at $7.20 per bushel. The global supply was increased while ending stocks were trimmed to 259.5 million metric tons (MMT), the lowest since the 2015-16 year. South America’s 2023-24 production estimates were within expectations and not significantly changed from last month’s USDA projections. Brazil’s soybeans slipped to 156 MMT from 157 MMT. Corn was lowered from 127 MMT in January to 124 MMT, which was nary equal to the average estimates. Earlier in the day, Brazil’s Conab lowered its soybean projection to 149.4 MMT; the corn crop was cut 113.7 MMT and the outlook for the safrinha crop’ outlook was trimmed to 88.1 MMT. Projections for Argentina were unchanged from January and even with analysts’ predictions. Source: USDA, Reuters, StoneX Related Posts February 2021 USDA Supply & Demand The USDA disappointed bullish traders with conservative usage and carryover estimates. The USDA corn demand estimates might have surprised traders the most. After seeing big business to China in corn and ethanol, traders had allowed their demand ideas to expand beyond the amounts the USDA was comfortable with. USDA left U.S. ethanol production unchanged, raised corn exports by a measly 50 million bushels, and lowered U.S. corn ending stocks by 50 million bushels, compared to the 160 million bushel reduction traders were expecting. Corn reacted by trading down 10 cents. U.S. bean carryover was reduced to 120 million bushels compared to the average trade guess of 123 million bushels. There were little changes in U.S. bean usage. U.S. bean exports were increased by 20 million bushels. South American bean and corn production numbers were left unchanged. All wheat supply demand numbers were left unchanged from last month. When the smoke cleared traders were left with disappointing U.S. numbers heading into the South American harvest. Source: USDA, Reuters, StoneX February USDA Supply & Demand Small fundamental changes disappoint bullish traders After the USDA released its numbers, prices slid across all crop markets before bouncing 15 minutes later. Kansas City wheat gave us the strongest post-report trade. KC March wheat rallied to new recent highs following the report with traders concerned about dry weather forecast in the western Southern Plains. Chicago and Minneapolis wheat also firmed but are currently trading below recent highs. This month’s 2022-23 U.S. corn outlook forecast lower corn used for ethanol by 25 million bushels. With no other use changes, U.S. corn ending stocks are up 25 million bushels from last month. The USDA lowered US soybean crush by 15 million bushels. With soybean exports unchanged, ending stocks are forecast at 225 million bushels, up 15 million. The 2022-23 U.S. wheat supply and demand numbers were little changed this month, with only minor revisions to domestic use and ending stocks. The global numbers contained no shocks either. Argentine production estimates were smaller than traders expected but were well below the USDA’s January estimates. Source: USDA, Bloomberg March 2024 USDA Supply & Demand USDA reduced world crop surplus. Source: USDA, Reuters, StoneX US 2023-24 grain carryout was left unchanged from last month except for a slight increase in wheat. As we’ve outlined in recent webinars, the USDA has not changed supply demand tables hardly at all since we began receiving them in May. World carryout was reduced for each of the three crops we follow. In each case, production was slightly smaller and consumption was increased, thereby decreasing carryout. The USDA is still using a bigger corn and bean production estimates for South America than most of the private estimates, so these stock estimates will likely be reduced next month. Twenty minutes after the report was released, corn, beans, and wheat were all sitting near their respective highs for the day. Corn moved solidly above the green line 20-day moving average. Look for a Sell Signal on Monday. We have been waiting for this corn Sell Signal but hate the price level. Keep your sales small on Monday. If you need to generate cash, make sales. If you want to dribble out a few bushels ... February USDA Supply & Demand USDA reports in line with pre-report estimates. No Surprises As you look at the table of numbers below, you will notice the biggest change came in Brazilian soybeans, which were cut 5 million tons from last month’s estimate, but still came right in the middle of what traders expected. The USDA expects a few more bushels of crop carryout, both in the world and U.S., but not enough of a difference to move prices. This is about the most neutral report we have seen in a while. Traders want to be bullish, thinking the combination of further South American crop losses, strong demand, and rampant inflation are all working in their favor. Spec funds are building bigger long positions in corn and beans and bailing out of short wheat. U.S. equity major indexes cleared the green line 20-day moving average yesterday and are posting additional gains today. Source: USDA, StoneX, Reuters April 2024 USDA Supply & Demand USDA report contained only small adjustments this month Traders see today’s fundamental forecast showing more than adequate supplies and ending stocks. The South American corn crop is still at risk and the USDA has refused to lower their estimate as far as private trade estimates have fallen. All of the northern hemisphere crops are into their risk periods. We have written virtually that same paragraph following each one of the most recent reports. The numbers have not really changed much since last fall, except the South American crops turned out to be smaller than expected. Today’s fundamentals have been well traded in recent weeks. There were no surprises today. Now we are all focused don’t he growing conditions in all the major production areas in the world, especially the United States. Most areas are off to a pretty good start but it is just April and too soon to tell how good crops are going to be. Today’s fundamentals tell traders that prices will be cheap this fall if we don’t have any weather problems in the United States or some ... January 2021 USDA Supply & Demand, Grain Stocks, and Winter Wheat Seedings January 2021 USDA Supply & Demand, Grain Stocks, and Winter Wheat Seedings: USDA tightens stocks The USDA reduced nearly all U.S. numbers below the average trade estimate. Supplies are smaller than traders thought, and markets surged. The biggest surprise in today’s estimates came in the corn market. The USDA reduced the U.S. 2020 corn yield by 3.8 bushels from their December estimate, taking it down 3.3 bushels from the average trade estimate. U.S. corn production was pegged at 14.182 billion bushels, down from 14.507 billion bushels in December. U.S. corn carryout was cut 150 million bushels, down to 1.552 billion bushels. The USDA also reduced the U.S. bean yield by 0.5 bushel/acre down to 50.2 bushels per acre, 0.3 bushels below trade estimates. That pulled U.S. bean production down 35 million bushels from the December estimate and 23 million below trade estimates. The USDA pegged U.S. soybean carryout at 140 million bushels down from the December estimate of 175 million bushels. This was one of a few estimates that were bigger than the trade expected, their guesses averaged 139 million bushels. U.S. wheat carryout ... Comments are closed.