AgriVisor Grain Recap

Saturday, February 09, 2019
   There’s a lot to write about with the plethora of USDA numbers released today. Both the corn and soybean production forecasts from the USDA came in a little under expectations and lower than the Nov. forecasts.  Corn is now thought to have had a 176.4 bu. yield, producing a 14.42 bln. bu. crop.  There was a minor downward adjustment in acreage, but the 0.1 mln. drop was in line with expectations.  The soybean crop had a similar fate, with the yield and production dropped from Nov, but numbers were still slightly less than forecast. The 4.544 bln. bu. crop and the 51.6 bu. yield were both slightly lower than expected. The acreage was also reduced by 0.2 mln., which was slightly more than the trade expected to see.  Still, none of the numbers were enough different to be of significance.  And, we still shake our head at Illinois yields in particular, especially the 65 bu. soybean yield in a state that has a lot of double crop acres. 

   The quarterly grain stocks numbers tend to go hand-in-hand with the marketing year s/d forecasts.  The Dec. 1 corn stocks, 11.952 bln. bu., were about 65 mln. less than expected, but the size of the stocks, combined with known consumption and production hinted feed/residual were lower than USDA has been expecting.  Even then, the 125 mln. bu. reduction seemed to be a little aggressive. The ethanol demand was reduced 25 mln. bu., consistent with soft grind numbers in recent weeks.  Exports were changed.  Changes cut demand 165 mln. bu. leaving ending stocks at 1.735 bln., not far from expectations.  Dec. 1 wheat stocks were a little higher than expected, suggesting feed demand has been soft. USDA cur 30 mln. bu. out of feed demand, and with other small changes, revised ending stocks up slightly to 1.01 bln. bu.

   Soybean stocks, 3.736 bln. bu., came in close to 50 mln. higher than the trade was expecting, but consistent with the production size according to our calculation. The biggest change they made in the s/d numbers beside production, was the 25 mln. bu. reduction in the export forecast, a shift tied to the struggling pace of sales/shipments, but those could have been tied to Chinese/US trade uncertainties. Crush was revised up 10 mln. bu, bringing the ending stocks in at 910 mln. bu., down 45 mln. from the last forecast.

   World wheat and corn numbers had some minor tweaks, but nothing significant. But for soybeans there were some important changes. Beginning stocks were lowered 3 mmt. to 98.09, mostly because of big changes in Bra and Arg., the former up 6.4 and the latter down nearly 10 mmt.  Ending stocks were changed similarly, Arg’s down nearly 12 mmt., with Bra’s raised nearly 3. The world ending stocks were dropped nearly 9 mmt. to 106.7. Growth in stocks at the 3 major exporters will only rise 10 mmt; before they were expected to jump 18. And if Bra’s crop(117 mmt) drops more, those stocks will likely drop more. Chinese imports were dropped 2 to 88 mmt., but it’s interesting to note consumption(106 mmt) is expected to be as bid as last year, ASF notwithstanding.

   The other notable feature was the winter wheat planting number, 31.3 mln. acres, down 1.2 mln. from last year. All classes were a part of the mix, but HRW plantings were down 0.7 mln., with SRW down 0.4 mln. from last year. 

   Otherwise, the news was mostly the standard stuff that has dominated the trade in recent weeks, mostly tied to China or S. American weather.  At week’s end there’s still some anxiousness regarding China’s trade negotiations because of the possibility the deadline will be missed.  As for S. American weather, Brazil still seems pointed to better moisture, while Arg. will be a bit drier.  CONAB will put out new Brazilian estimates on Tuesday.  The only other important tidbit was the result of the latest Egyptian wheat tender.  They bought 300,000 tons from Romania, France, and U.S.  The SRW bought from the U.S. was the lowest price, even after freight was included.