Commodity markets traded higher following a bullish report from the Department of Agriculture that led to increases across the board. 

Friday’s World Agricultural Supply and Demand Estimates report attempted to factor in the effects of the war in Ukraine, which has "significantly increased the uncertainty of agricultural supply and demand conditions in the region and globally." Ukraine and Russia normally account for about 30% of the global trade in wheat.

The WASDE predicted that wheat exports by Russia, Brazil, and Argentina would not completely offset lower exports by the European Union, Ukraine, the United States, and Kazakhstan.

USDA kept corn ending stocks for the U.S. at 1.44 billion bushels, even though the market has been trading on the assumption that those stocks will dip below 1 billion bushels, said Allendale Inc. chief strategist Rich Nelson.

“They are slowly recognizing problems with Ukraine corn exports, and Ukraine wheat exports,” Nelson said, but “they're not yet recognizing what could come for future U.S. corn export sales” because of the war.

Nelson said USDA’s approach is not wrong. “From their perspective, they're just looking at corn export sales,” which recently have been “not impressive at all,” he said.

May corn futures were up between 12 and 13 cents per bushel, to $7.70/bu, in trading about an hour after the report’s release at noon ET.

Hard red winter wheat in Kansas City was trading at $11/bushel for May at about the same time. That’s up about 29 cents/bu. Soft red winter wheat in Chicago was also up about 27 cents to $10.47/bu.

The report estimated Ukraine’s wheat exports at 19 million tons, down by 1 million tons from the March estimate, as the country’s Black Sea ports remain shuttered since Russia invaded Feb. 24. “The majority of Ukraine’s exports have already been shipped with limited additional amounts expected for the remainder of 2021/22,” the report said.

The wheat export estimate from Russia was raised by 1 million tons to 33 million “as it continues to export at competitive prices,” the WASDE said.

“The global wheat outlook for 2021/22 is for slightly higher supplies, increased consumption, lower trade, and reduced ending stocks,” the report said. “Supplies are increased by 0.7 million tons to slightly more than 1 billion “on a combination of higher beginning stocks for Pakistan, Brazil, and Saudi Arabia and higher production for Pakistan and Argentina more than offsetting lower EU production.”

USDA lowered estimates for U.S. wheat exports to 785 million bushels, which would be the lowest since 2015/16, “as the U.S. remains uncompetitive to most markets.”

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For the U.S., “Projected 2021/22 ending stocks were raised 25 million bushels to 678 million, which are still 20% lower than last year,” USDA said. The WASDE also raised the projected season-average farm price (SAFP) by 10 cents to $7.60 per bushel. That would be the SAFP since 2012/13.

On U.S. soybeans, the WASDE forecast increased estimates for exports and seed use, and lowered its estimate for ending stocks. “Soybean exports are raised 25 million bushels to 2.12 billion, partly offsetting lower exports from Brazil, Ukraine, and Russia,” the report said.

The report projected lower production, crush, trade, and ending stocks for soybeans, estimating global soybean production at 350.7 million tons, down 3.1 million tons because of smaller crops in Brazil and Paraguay.

USDA did not change its season-average soybean price, keeping it at $13.25 per bushel. Soybean meal prices also stayed the same at $420 per short ton, while the price for soybean oil price is projected at 70 cents per pound, up 2 cents. Soybeans were trading at $16.82/bu at about 1:30 ET, up 35 cents/bu.

“Another notable oilseed change this month includes lower sunflower seed crush for Ukraine, leading to lower meal and oil supplies for major markets like India, China, the EU, and Turkey,” the report said. “Partly offsetting these declines are higher palm and rapeseed oil imports for China, higher soybean oil imports for India, higher soybean meal imports for Turkey, and higher soybean imports for the EU.”

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