Farm Progress

Argentina, Brazil corn, soy crops increased.

Bob Burgdorfer, Senior Editor

April 11, 2017

2 Min Read

USDA on Tuesday left ending stocks for corn unchanged as it increased demand by ethanol, but reduced it by livestock feeders.

Soybean ending stocks were raised by 10 million bushels to 445 million due to a reduction in "residual disappearance." Exports and the crush numbers were left unchanged. The 445 million was a little higher than what Farm Futures expected, but was close to trade averages in wire service surveys.

U.S. wheat ending stocks were increased by 30 million bushels to 1.159 billion, which topped some trade estimates, but was smaller than Farm Futures' forecast. USDA arrived at that higher number by lowering feed and residual use.

In South America, USDA raised Argentina and Brazil's corn crops to 38.5 million and 93.5 million metric tons from 37.5 million and 91.5 million and raised those soybean crops to 56 million and 111 million. The increase in corn is a little larger than many trade expectations, while the soybean numbers were about as expected.

Chicago corn, soybean and wheat futures moved lower after the report, with corn futures about 4 cents lower for the day, soybean 8 cents lower and SRW wheat 4 cents lower.

“As I expected, the big news out of USDA’s reports was from South America, where the agency’s forecast for increased production is weighing on prices for corn and soybeans,” said Bryce Knorr, Farm Futures senior grain analyst. “USDA’s projections were a little more than the trade anticipated but pretty close to where I was at.”

In the world numbers, USDA raised carryouts for all three crops, with corn at nearly 223 million metric tons, up 3 million, soybeans at 87.41 million, up 4.4 million, and wheat at nearly 252.3 million, up nearly 2.4 million.

“Despite increasing its forecast for Chinese imports, adding almost 170 million bushels to world carryout was a real wake-up call to farmers around the world expanding production,” said Knorr. “The global economy is growing, but prices may have to stay low long enough for livestock production to ramp up and eat into the surplus.”

The 30 million increase in the carryout for U.S. wheat was a little less than what Farm Futures’ expected but more than the broader trade forecasts.

“Exports are also disappointing, though USDA made no adjustment on that score this time,” Knorr said of wheat exports. “Wheat, even more than corn or beans, is all about weather, and the clock is ticking.”

USDA left wheat exports at 1.025 billion bushels but lowered feed and residual used by 35 million to 190 million and lowered imports by 5 million.  

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