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USDA WASDE Report - Neutral

Published on Tuesday, April 9, 2019

Across Wheat, Corn, and Soybeans, very little by way of surprises were brought forward in the USDA's April release of the World Agricultural Supply & Demand Estimates (WASDE).  Corn ending stocks rose in harmony with the larger Quarterly Grain Stocks report released at the end of March.  On that same note, soybeans were left largely unchanged.  The USDA made little by way of changes to South American production.  Given that they did not race lower with their estimates in February, little adjustment was needed now that local estimates there are marching back higher.  A closer look at each crop and its balance sheet is found below:
 
WHEAT:  The outlook for 2018/19 U.S. wheat this month is for unchanged supplies but reduced exports and domestic use.  The NASS Grain Stocks report, issued March 29, implied less feed and residual use for both the second and third quarters.  Total 2018/19 feed and residual use is lowered 10 million bushels to 70 million.  Wheat exports are lowered 20 million bushels to 945 million on a continued sluggish export pace.  By class, Hard Red Winter exports are raised 10 million bushels, which is offset by reductions of 15 million for Hard Red Spring, 10 million for White, and 5 million for Durum.  These demand changes, as well as a small reduction in seed use, led to a 31.5-million-bushel-increase in ending stocks, which are now projected at 1,087 million bushels.  The season-average farm price is raised $0.05 per bushel at the midpoint to $5.20 based on updated NASS price and marketing data. 

World 2018/19 wheat supplies are raised 2.1 million tons due mainly to increased beginning stocks that largely reflect multi-year revisions for Iran.  Global production and exports are each reduced fractionally, but domestic consumption is lowered 2.9 million tons.  The consumption change stems primarily from lower Iran and EU feed and residual use; Iran is lowered on the series revision and the EU reduction is based on more competitive corn prices and increased coarse grain disappearance.  With supplies increasing and total use declining, global ending stocks are raised 5.1 million tons to 275.6 million.

COARSE GRAINS: 

This month’s 2018/19 U.S. corn outlook is for lower feed and residual use, reductions in corn used for ethanol and exports, and larger stocks.  Feed and residual use is lowered 75 million bushels to 5.300 billion based on corn stocks reported as of March 1, which indicated disappearance during the December-February quarter declined about 9 percent relative to a year ago.  Corn used to produce ethanol is lowered 50 million bushels to 5.500 billion based on the most recent data from the Grain Crushings and Co-Products Production report, and the pace of weekly ethanol production during March as indicated by Energy Information Administration data.  Exports are reduced 75 million bushels to 2.300 billion, reflecting current outstanding sales and expectations of increased competition from Brazil, Argentina, and Ukraine.  With supply unchanged and use declining, ending stocks are raised 200 million bushels to 2.035 billion.  The season-average corn price received by producers is unchanged at a midpoint of $3.55 per bushel.

The global coarse grain production forecast for 2018/19 is up 5.3 million tons to 1,377.2 million.  This month’s foreign coarse grain outlook is for larger production, increased trade, greater use, and marginally higher stocks relative to last month.  Brazil corn production is raised, reflecting improved yield prospects for second-crop corn.  Argentina corn is higher based on expectations of larger area. Corn production is raised for the EU, Mexico, and Indonesia, with reductions for the Philippines and Pakistan.
 
Major global trade changes for 2018/19 include higher projected corn exports for Brazil, Argentina, the EU, and Ukraine with a partially offsetting reduction for the United States.  Corn imports are raised for the EU and South Africa, with lower projections for Vietnam and Bangladesh. Foreign corn ending stocks for 2018/19 are raised from last month, mostly reflecting increases for Mexico, Indonesia and South Africa that more than offset declines for Vietnam, Brazil, Pakistan, Bangladesh, and Argentina.  

OILSEEDS:  U.S. soybean supply and use changes for 2018/19 include lower imports, higher seed use, and lower ending stocks.  Soybean imports are reduced in line with reported trade through January while lower seed use reflects plantings indicated in the March 29 Prospective Plantings report.  With soybean crush and exports unchanged, ending stocks are projected at 895 million bushels, down 5 million.  Soybean oil changes include increased imports and domestic disappearance for bio-diesel and for food use, and lower ending stocks.  The season-average soybean price is forecast at $8.35 to $8.85, unchanged at the midpoint.  Soybean oil price is projected at 28.0 to 30.0 cents per pound, down 1 cent at the midpoint.  Soybean meal prices are projected at $305 to $325 per short ton, unchanged at the midpoint.

he 2018/19 global oilseed supply and demand forecasts include increased production, lower exports, and increased stocks compared to last month.  Global oilseed production is raised 2.0 million tons to 595.0 million mainly on higher soybean production for Brazil and rapeseed production for India.  Production for Brazil is increased 0.5 million tons to 117.0 million, reflecting favorable weather in Rio Grande do Sul where the crop is in pod-filling and maturation stages.  Brazil’s 2017/18 soybean crop is also revised higher, supported by recent industry estimates.  Rapeseed production for India is raised 1.4 million tons to 8 million on information from India’s Solvent Extractors’ Association.
 
Global oilseed exports are reduced 1.0 million tons to 177.1 million mainly on lower rapeseed trade between Canada and China.  With lower rapeseed crush for China, imports are increased for other products, including sunflowerseed meal, rapeseed meal, palm oil, and soybean oil.  Global oilseed ending stocks are raised 1.5 million tons to 123.2 million, largely due to higher soybean stocks for Brazil and rapeseed stocks for Canada.