The March World Agricultural Supply and Demand Estimates (WASDE) report, as expected, had zero changes in U.S. ending stocks, while world numbers provided little market-moving news. Perhaps the most notable changes were a 1 million metric ton (mmt) increase in both Argentine and Brazilian soybean production, further extending the recent era of plentiful world grain and soybean stocks. World soybean ending stocks rose by 3.6 mmt to 102.44 mmt (3.76 billion bushels).
Let’s take a look at some of the changes in both U.S. and world numbers from the March 10 report.
There were no changes in U.S. corn demand or ending stocks, resulting in stocks of 1.892 billion bushels (bb). Some analysts had expected a drop in U.S. exports by as much as 100 mb to account for the lagging pace of exports, but that did not occur.
World ending stocks rose by a modest 500,000 metric tons (mt) to 297.34 mmt (11.7 bb). Some notable changes were Russian corn production, which was down 200,000 mt, and South African production, which rose by 1.5 mmt. Brazil and Argentine corn production estimates were left unchanged at 101 mmt and 50 mmt, respectively.
South Africa’s exports rose by 500,000 mt to 2.5 mmt, while Ukraine’s corn exports also rose by 1 mmt to 32 mmt. Canada’s imports of corn were raised by 500,000 mt to 1.5 mmt. The average seasonal price for corn was lowered 5 cents to $3.80 per bushel.
Corn futures prices were little changed following the report, as expected.
As in corn, there were no changes to the ending stocks number for U.S. soybeans, as that remained at 425 million bushels (mb). Traders, according to Dow Jones, had looked for a slight increase in carryout to 440 mb. Some analysts had looked for a decline in U.S. soybean exports, but that was not the case.
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World ending stocks of soybeans did increase by a larger-than-expected 3.6 mmt (133 mb), compared to 98.9 mmt in February and the pre-report trade estimate of 100.4 mmt.
Some of the changes that led to the larger stocks number were an increase in both Brazilian and Argentine soybean production by 1 mmt each to a record-large 126 mmt (4.6 bb) and 54 mmt (1.98 bb), respectively. The combined 180 mmt estimate for the two countries would also be the largest in history.
On the demand side, Argentine crush was lowered by 1 mmt to 43.6 mmt, likely due to increased export taxes. Soybean seasonal average price was dropped by 5 cents to $8.70 per bushel. There were only minor reductions in both soybean meal and oil ending stocks. China’s soybean imports were left unchanged at 88 mmt.
There was, as expected, no change in U.S. wheat ending stocks.
World ending stocks of wheat fell modestly by 800,000 mt to a still record-large 287.14 mmt (10.55 bb). Some of the notable changes included Argentine wheat production rising by 500,000 mt to 19.5 mmt; Australian production falling by 400,000 mt to 15.2 mmt and India’s wheat production adjusted higher by 1.4 mmt to a record-large 103.6 mmt.
Russia’s wheat exports were raised 1 mmt to 35 mmt, while imports were raised to record-large levels for both Bangladesh (6.5 mmt) and Turkey by 2 mmt to 10.5 mmt.
As most in the trade had anticipated, the March WASDE report held little fanfare. Once again, it reinforced the ongoing profile of plentiful supplies in world grain and soybean markets, especially with respect to wheat and soybeans.
With this report out of the way, markets will again be focused on world macro influences, and weather, at least until the all-important USDA stocks and seeding report in late March.
Dana Mantini can be reached at email@example.com
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