Traders saw very few if any surprises in USDA’s World Agriculture Supply and Demand Report released today and will eye weather as the next potential market mover.
Corn saw higher ending stocks, lower exports and lower use for ethanol. Exports dropped 75 million bushels to 2.3 billion due to expectations of increased exports for Brazil and Argentina. Ending stocks rose 100 million bushels to 1.8 billion and the average price dropped 5 cents to $3.30 per bushel. Corn used for ethanol lowered 25 million bushels to 5.5 billion.
The weather across much of the Corn Belt over the next two weeks shows below average temperatures.
“But farmers are starting to be concerned with what is going to happen when we do warm up. Will we see flooding, and how we will deal with that the later as it gets closer to planting?” Allendale Inc. President Steve Georgy tells Agri-Pulse.
Soybean ending stocks dropped 10 million bushels to 900 million and exports remain unchanged from last month’s report. Crush climbed to 2.1 million, 10 million higher from last month. Increased crush rates caused soybean oil production to climb 115 million pounds to 24.6 billion. Prices ranged from $8.10 to $9.10.
Soybean traders continue to watch U.S. and China trade negotiations.
“Now they’re saying by the end of March, maybe we're going to sit down with the Chinese President (Xi Jinping) and have something together, but right now trade talk has become stale,” Georgy said.
The wheat complex continues to get a lot of stir right now though, he said. The outlook shows a larger supply, lower exports along with less domestic use, and higher ending stocks. Supplies increased 5 million bushels based on higher imports. Exports lowered 35 million bushels to 965 million. Hard Red Spring and White dropped due to export competition. Ending stocks rise 45 million to 1.05 billion. Last year, the U.S. wheat market measured 1.1 billion bushels of carryout.
“That’s more from where we’re at right now but this decline we’ve seen in wheat prices has been severe. It’s almost been a dollar lower for wheat,” Georgy said. Ending stocks are below last year's levels, and he anticipated those numbers may “spark a little bit of buying.”
Rice imports rose half a million cwt to a record 29 million on increased shipments to China and Puerto Rico. Exports slid 2 million down from last month to 98 million on a slow shipment pace. Rice exports however are expected to increase 11 million from the year as the industry becomes more competitive. Cotton supply and demand estimates are unchanged from last month.
The next big report grain traders will be watching is the Prospective Plantings report set to be released March 29. Last month, USDA estimated farmers will plant 85 million acres of soybeans and 92 million acres of corn.
“If we get a push higher in bean prices, my fear is that we will have more bean acres than what we think. It may not be that 4 million-acre decline in beans like some are talking about,” Georgy said.
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