MarketsFarm — Expected changes to ending stocks for soybeans, corn and wheat did not occur in the latest supply and demand report Tuesday from the U.S. Department of Agriculture (USDA). Rather, the department held onto its February projections.
“I’m disappointed [the USDA] didn’t adjust anything. I’m not saying they didn’t do their homework. I’m just saying it’s a little peculiar you get this type [of report],” Sean Lusk of Walsh Commercial Hedging Services in Chicago said.
There were trade expectations that soybean ending stocks in USDA’s March edition of the world agricultural supply and demand estimates (WASDE) were going to be trimmed from 120 million bushels to an average of 117 million.
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Corn had been expected to slip from 1.5 billion bushels to 1.47 billion, while wheat was thought to be bumped up from 836 million bushels to 839 million.
“For corn and beans, it’s a mathematical possibility it can be the same. It can happen, but it’s like finding the needle in a haystack,” Lusk said.
“The market has a lot of longs in here. This report fuels the fire for the longs to take profits because you didn’t have bullish inputs,” he added, noting how the Chicago Board of Trade (CBOT) closes is more important than how it performs until then.
Although U.S. ending stocks weren’t changed in the March report, they are a fair bit lower than those in the 2019-20 marketing year. The soybean carryout was 525 million bushels in 19-20, with that for corn at 1.92 billion bushels and 1.03 billion for wheat.
On a global perspective, the March WASDE lowered wheat ending stocks by nearly one per cent to 301.19 million. The carryover for corn was nudged up by almost 0.4 per cent, while that for soybeans was raised by nearly a half point.
Walsh said South American weather will continue to play a factor in CBOT prices. Wet conditions have slowed Brazil’s soybean harvest and the planting of the country’s Safrinha corn crop. Dry conditions in Argentina have posed a challenge to soybean and corn yields.
— Glen Hallick reports for MarketsFarm from Winnipeg.
