Tight Wheat Inventories Projected


On Friday morning, the USDA released it’s March Crop Production and World Agricultural Supply and Deamnd Estimates (WASDE).

USDA increased Brazil’s corn production by 1 million metric tons to 62 mmt and held Argentina’s corn production steady at 22 mmt.

South American soybean forecasts were lowered to 68.5 mmt in Brazil, a 3.5 mmt decrease, and 46.5 mmt in Argentina, a 1.5 mmt decrease.

USDA also left U.S. ending stocks for corn and soybeans unchanged at 801 million bushels and 275 mb respectively, higher than the average trade guess but within the expect range.


The South American estimates came in at 62 mmt and 22 mmt, higher than pre-report trade estimates of 60.2 mmt in Brazil and 21.3 mmt in Argentina.

USDA projected Ukraine’s corn production at 22.5 mmt, unchanged from last month.

A slew of private and South American forecasters also released their projections this week. Brazilian analyst Celeres pegged the corn crop at 60.4 mmt while Informa estimated Brazil’s crop at 61.5 mmt and Argentina’s at 22.5 mmt.

USDA pegged world ending stocks at 124.53 mmt, with South America accounting for most of the 1.2 mmt drop. The average pre-report estimate came in at 123.47 mmt. The reduced number puts global stocks-to-use at 14.3{962fe9be9a8a5c386944bfa41f48d98b010325707b70b1fa6182bcabd27c5d7f}, a slight decrease from February.


USDA CUT Brazil’s soybean output to 68.5 mmt from its February estimate of 72 mmt, more than the average trade estimate. It lowered Argentina’s production to 46.5 compared to its February estimate of 48 mmt and about even with traders’ expectations.

Informa estimates Brazil’s production will be 68 mmt, but forecasts Argentina’s crop would be 1 mmt larger at 47.5 mmt due to timely rains. Celeres forecast Brazil’s crop at 69.8 mmt, while Brazilian crusher Abiove pegged it at 69.5 mmt.

USDA cut global soybean ending stocks by 2.98 mmt to 57.3 mmt, which puts stocks-to-use at 22.5{962fe9be9a8a5c386944bfa41f48d98b010325707b70b1fa6182bcabd27c5d7f}.

Traders thought global soybean ending stocks would be reduced 2.52 mmt to a total of 57.76 mmt.

“Soybeans at 57.3 mmt were lower than expected, but the question is has it been priced into the recent rally?” said DTN Senior Analyst Darin Newsom.


While much trade attention has been paid to below-average temperatures in Europe, USDA left the EU-27 production estimates unchanged at 137.49 and slightly lowered its forecast for the 12 former Soviet Union countries to 114.3 mmt.

USDA upped Australian wheat production by 1.2 mmt to 29.5 mmt and left Canadian production unchanged from its last estimate at 25.3 mmt.

The latest production estimates put global stocks-to-use at 30.6{962fe9be9a8a5c386944bfa41f48d98b010325707b70b1fa6182bcabd27c5d7f}

“The bottom line for wheat is that the ending stocks-to-use figure of 30.6{962fe9be9a8a5c386944bfa41f48d98b010325707b70b1fa6182bcabd27c5d7f} remains bearish,” Newsom said.


U.S. corn ending stocks were left unchanged for corn and USDA didn’t revise export or feed estimates. While U.S. soybean ending stocks were left unchanged, USDA decreased its seed use by 1 mmt and increased residual use by 2 mmt.

Wheat ending stocks were pegged at 825 mb, a 20 mb drop from February’s report, largely due to an increase in export expectations and increased feed usage.

“Little excitement was generated by the U.S. ending stocks numbers,” Newsom said. “Corn and soybeans were left unchanged from February; wheat was down 20 mb on an increase in export demand. The latter is interesting given that the market is running behind pace to meet the previous estimate of 975 mb.” 

U.S. ENDING STOCKS (billion bushels) 2011-2012
  Mar. Average High Low Feb. 2010-11
Corn 0.801 0.785 0.825 0.746 0.801 1.128
Soybeans 0.275 0.260 0.300 0.245 0.275 0.215
Wheat 0.825 0.836 0.878 0.811 0.845 0.862
Sorghum 0.027 0.026 0.030 0.022 0.027 0.027
WORLD ENDING STOCKS (million metric tons) 2011-2012
  Mar. Average High Low Feb. 2010-11
Corn 124.53 123.47 125.00 122.00 125.35 129.07
Soybeans 57.30 57.76 59.95 56.00 60.28 68.76
Wheat 209.58 212.61 216.00 210.00 213.10 199.49
Coarse Grains 157.90 156.10 158.60 153.60 158.49 158.49
WORLD PRODUCTION (Million Metric Tons)
    2011-2012   2010-2011
    Mar. Feb.   Mar. Feb.
Brazil corn   62.0 61.0   57.5 57.5
Argentina corn   22.00 22.0   23.75 22.5
Brazil soybeans   68.5 72.0   75.5 75.5
Argentine soybeans   46.5 48.0   49.0 49.0
Australia wheat   29.5 28.3   27.89 27.9
Canada wheat   25.3 25.3   23.17 23.2


Source: DTN

Posted by Northern Ag Network

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