Today, USDA released the April World Agricultural Supply and Demand Estimates (WASDE) report.
2023/2024 U.S. ending stocks
The WASDE report pegged the U.S. 2023/2024 corn ending stocks lower month-over-month, but not as low as the trade expected. Soybean ending stocks were increased by 25 million bushels, more than the trade expected. Wheat ending stocks were pegged higher than expected as well.
| 2023/2024 U.S. ending stocks estimates (bushels) | |||
|---|---|---|---|
| April | Trade Expectation | March | |
| Corn | 2.122 billion | 2.102 billion | 2.172 billion |
| Soybeans | 340 million | 319 million | 315 million |
| Wheat | 698 million | 691 million | 673 million |
2023/2024 Argentina and Brazil crop production
USDA exceeded trade expectations with its lower estimate for Argentina corn production. Brazil corn production, however, held steady. The trade expected a decrease.
| Argentina and Brazil corn production (million metric tons) | |||
|---|---|---|---|
| April | Trade Expectation | March | |
| Argentina | 55 | 55.8 | 56 |
| Brazil | 124 | 121.8 | 124 |
For soybeans, USDA held production steady for both countries. The trade expected an increase for Argentina and a decrease for Brazil.
| Argentina and Brazil soybean production (million metric tons) | |||
|---|---|---|---|
| April | Trade Expectation | March | |
| Argentina | 50 | 50.7 | 50 |
| Brazil | 155 | 151.8 | 155 |
2023/2024 world ending stocks
USDA decreased global corn, soybean, and wheat ending stocks. For corn and soybeans the decreases were smaller than expected. Concerning wheat, the trade expected an increase in ending stocks.
| 2023/2024 World ending stocks estimates (million metric tons) | |||
|---|---|---|---|
| April | Trade Expectation | March | |
| Corn | 318.3 | 316.6 | 319.6 |
| Soybeans | 114.2 | 113.6 | 114.3 |
| Wheat | 258.3 | 259.1 | 258.8 |
More from USDA
Corn
“This month’s 2023/2024 U.S. corn outlook is for greater corn used for ethanol and feed and residual use and smaller ending stocks,” says USDA in the report.
“Corn used for ethanol is raised 25 million bushels to 5.4 billion based on data through February from the Grain Crushings and Co-Products Production report and weekly ethanol production data as reported by the Energy Information Administration for the month of March. Feed and residual use is increased 25 million to 5.7 billion based on indicated disappearance during the December-February quarter. With no supply changes and use rising, ending stocks are lowered 50 million bushels to 2.1 billion bushels.”
Soybeans
“The outlook for U.S. soybean supply and use for 2023/2024 includes lower imports, residual, and exports, and higher ending stocks,” USDA says. “With the trade changes and slightly lower residual, soybean ending stocks are raised 25 million bushels to 340 million.”
Wheat
“This month’s supply and demand outlook for 2023/2024 U.S. wheat is for lower supplies, reduced domestic use, unchanged exports, and higher ending stocks,” the WASDE report says. “Supplies are tightened with a reduction in projected imports by 5 million bushels to 140 million on a slower-than-expected import pace, primarily for Hard Red Winter [wheat.]
“Domestic consumption is forecast down on lower-than-expected implied feed and residual use in the second and third quarters based on the latest NASS [National Agricultural Statistics Service] Grain Stocks report. As a result, annual feed and residual use is lowered 30 million bushels to 90 million. Projected 2023/2024 ending stocks are raised 25 million bushels to 698 million, 22% above last year.”
Trade reaction
Naomi Blohm, senior market advisor for Total Farm Marketing: “Today’s USDA report was nearly as expected regarding U.S. data. USDA had slight increases in demand for corn use, which brought ending stocks down. However, ending stocks are still deemed large, at over 2 billion bushels.
“Trade was looking for friendlier information from the USDA regarding South American production. While USDA did lower the Argentina corn production number, they continue to dig in their heels and not lower production numbers for Brazil corn or soybeans, even though … Conab again suggested otherwise this morning.
“My personal opinion is that USDA is content to kick the can down the road, and let Mother Nature be the catalyst for potential price movement later this spring or summer. Once the [U.S.] crop is in the ground and growing, then maybe we’ll see USDA be more aggressive in their South American production cuts.”
Jeremy McCann, account manager with Farmer’s Keeper: “My thoughts immediately following the report are bearish, and this report fits the narrative of how poor our exports and domestic usage has been. The narrative this report doesn’t fit is South American production. USDA has been very cautious on lowering their production, which could be due to unaccounted-for acres. Overall, these are not the report results that American producers wanted.”
Joe Lardy, research analyst with CHS, on soybean ending stocks exceeding trade expectations: “USDA did not increase crush, and I would certainly assume that other people had an increase to crush, just given the fact that, off the top of my head, the last five or six NOPA [National Oilseed Processors Association] reports all had monthly records for crush. So I’m a little surprised that they haven’t gone in that direction. And I had a 25 million bushel increase in my estimate. So if I take that out, my ending stocks number would’ve been at 336, so I would’ve been right in line with USDA.”
Source: Successful Farming
