Grain markets barely reacted to USDA’s World Agricultural Supply and Demand Estimates report released Tuesday as U.S. corn ending stocks for this marketing year are expected to grow but not as high as traders had expected.
For the 2019/20 crop year, USDA is predicting corn ending stocks to grow to 2.098 billion bushels; the average trade guess was 2.22 billion bushels.
“That was a surprise when they were looking for a little bit more,” Allendale Broker Nathan Cardwell told Agri-Pulse. “We were looking for some support, but we only bumped ending stocks in corn by six million bushels.”
The six-million-bushel increase is from the department’s previous estimate of 2.092 billion bushels.
Cardwell said the 2020/21 corn ending stock number was also “right in line” with what trade was expecting. USDA is estimating corn ending stocks to be at 3.31 billion bushels this next year which was slightly lower than the average trade guess of 3.42 billion bushels.
“They lowered ethanol demand, they did increase feed, and raised exports as well,” he said.
However, Cardwell said there is some room for the ending stock number to change as some traders argue ethanol use of 5.2 billion bushels of corn is still too high.
“We could still see that number having to come down to add to carryout,” he said. Cardwell also noted planting pace will be important to watch too if producers get good weather.
USDA raised 2019/20 soybean projections to 580 million bushels, higher than the average trade guess of 497 million and USDA’s previous month estimate of 480 million bushels.
Cardwell said USDA lowered soybean exports by 100 million bushels which increased the bottom-line ending stock number everyone was looking for.
USDA is projecting 2020/21 soybean ending stocks at 405 million bushels compared to the average trade guess of 440 million bushels.
The department increased new crop or 2020/21 wheat ending stocks to 909 million bushels when the average trade guess was 818 million bushels.
“I think that has to do initially with the uncertainty in regard to the production we are going to be looking at this year,” he said.
USDA is projecting wheat production for 2020/21 at 1.86 billion bushels.
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The USDA’s National Agricultural Statistics Service also released the Crop Production report including updated harvest information from the Crop Production 2019 Annual Summary released January 10.
NASS officials resurveyed producers in Michigan, Minnesota, North Dakota, South Dakota, and Wisconsin in April who reported unharvested corn and soybean acres in last December.
Corn harvest area estimates were reduced in Minnesota, South Dakota, and Wisconsin including yield changes in those states and Michigan, according to the report. USDA now estimates 2019 corn production at 13.7 million bushels or less than 1% from the January 10 summary.
Soybean harvest area estimates were reduced in Michigan and Wisconsin which caused U.S. soybean production to drop slightly 3.56 million bushels from the initial reporting earlier this year.
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