By Darin Newsom
DTN Senior Analyst
Once again, USDA isn't expected to blink in its projections for corn and soybean demand in its March 9 reports. It's like trying to stare down a cat.
USDA will release its latest Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports at 11 a.m. CST Thursday.
U.S. ENDING STOCKS
The average pre-report estimate for corn came in at 2.320 billion bushels, unchanged from USDA's February projection. This despite corn exports running 68% ahead of last year at the end of February (end of Q2), as compared to USDA's current projection of a 17% marketing year-to-marketing year increase. First-half feed and ethanol demand was also stronger than expected, so it will be interesting to see if USDA waits until its March 31 Quarterly Stocks report before making changes to projected demand (in the April Supply and Demand report).
Similarly, export and crush demand for U.S. soybeans was stronger than expected through the first two quarters, with total export shipments running 15% ahead of last year. In its February report, USDA maintained a marketing year-to-marketing year increase of only 6%. The average pre-report estimate for March soybean ending stocks came in at 414 million bushels, down slightly from USDA's February number of 420 mb. The last three years, as part of a larger 64% decrease from its high estimate to final Sept. 30 Quarterly Stocks figure, USDA has left its soybean ending stocks estimate unchanged to increasing it slightly between February and March.
The average pre-report estimate for U.S. wheat ending stocks came in at 1.136 bb. Though down a miniscule 3 mb from USDA's February projection, it's still a big number. And we mustn't forget that the February number included a still-curious 50 mb increase in export demand, an increase that weekly shipment numbers have yet to confirm. Through its first three quarters (end of February), total wheat shipments were running 29% ahead of last year, as compared to USDA's updated call for a 32% marketing year-to-marketing year increase. As with the other grains, no further significant change may be seen until the March 30 Quarterly Stocks report has come and gone.
WORLD ENDING STOCKS
Where domestic ending stocks are expected to stay the same or decrease slightly, a different picture is painted by average pre-report estimates for world ending stocks. Guesses averaged 218.6 million metric tons for corn, an increase from the February WASDE projection of 217.6 mmt. The bulk of this would be due to expected increases in both Brazilian (1.1 mmt) and Argentine (0.1 mmt) production. However, given these expected increases compared to the ending stocks estimate, it could be deduced that world corn demand is also expected to increase slightly.
The average pre-report estimate for world soybean ending stocks came in at 81.3 mmt, up from the February figure of 80.4 mmt. Again, an increase is expected for Brazilian production, with the average estimate coming in at 106.1 mmt (as compared to February's 104 mmt). USDA is expected to decrease Argentine soybean production to 55.1 mmt from last month's 55.5 mmt. Also, like corn, if these changes are close to what is actually seen in the March WASDE report, world demand would increase slightly.
World wheat ending stocks are expected to increase, a wee bit, from February's 248.6 mmt to an average pre-report estimate of 248.8 mmt. Production numbers for both the European Union and 12 states of the former Soviet Union will be watched for changes.
| U.S. ENDING STOCKS (billion bushels) 2016-2017 |
| Mar | Average | High | Low | Feb | 2015-16 |
| Corn | | 2.320 | 2.440 | 2.245 | 2.320 | 1.737 |
| Soybeans | | 0.414 | 0.444 | 0.390 | 0.420 | 0.197 |
| Wheat | | 1.136 | 1.165 | 1.050 | 1.139 | 0.976 |
| Sorghum | | 0.039 | 0.041 | 0.035 | 0.038 | 0.037 |
| WORLD ENDING STOCKS (million metric tons) 2016-2017 |
| Mar | Average | High | Low | Feb | 2015-16 |
| Corn | | 218.60 | 223.10 | 217.00 | 217.60 | 210.40 |
| Soybeans | | 81.30 | 82.20 | 80.00 | 80.40 | 77.20 |
| Wheat | | 248.80 | 250.00 | 247.40 | 248.60 | 240.80 |
| WORLD PRODUCTION (million metric tons) 2016-2017 |
| Mar | Avg | High | Low | Feb | 2015-16 |
| Corn |
| Brazil | | 87.6 | 91.5 | 86.0 | 86.5 | 67.0 |
| Argentina | | 36.6 | 37.0 | 36.0 | 36.5 | 29.0 |
| Soybeans |
| Brazil | | 106.1 | 108.0 | 105.0 | 104.0 | 96.5 |
| Argentina | | 55.1 | 56.0 | 54.0 | 55.5 | 56.8 |
| Wheat |
| European Union | | | | | 144.9 | 160.0 |
| FSU-12 | | | | | 130.2 | 118.2 |
Darin Newsom can be reached at darin.newsom@dtn.com
(AG/)
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