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Following USDA's March 1 Grain Stocks report, Thursday's World Agricultural Supply and Demand Estimates (WASDE) report should reduce corn's U.S. ending stocks and may reduce the export estimate for soybeans. Traders will also note changes to USDA's South American production estimates.

CORN

USDA has kept its estimate of U.S. ending corn stocks at 2.172 billion bushels (bb) since the February WASDE report, but there is a good chance the estimate will be lowered Thursday. Corn exports for 2023-24 are up 33% from a year ago and ethanol production is up 4.5% from a year ago, both above USDA's estimated paces. Also, USDA found 8.347 bb of corn on hand as of March 1, 102 million bushels (mb) less than analysts were expecting in Dow Jones' survey. Speaking of that survey, analysts expect USDA to lower its estimate of U.S. ending corn stocks to 2.105 bb Thursday, an estimate that would still be the highest in five years.

Meanwhile, Argentina's corn crop is 11% harvested and the Buenos Aires Grain Exchange recently lowered its production estimate for Argentina to 52.0 million metric tons (mmt) or 2.05 bb, less than USDA's estimate of 56.0 mmt. Dow Jones' survey expects only a slight reduction for Argentina's corn production, to 55.3 mmt or 2.18 bb. For Brazil, USDA is expected to lower its estimate of corn production from 124.0 mmt to 122.1 mmt or 4.81 bb. Overall, USDA's estimate of world ending corn stocks in 2023-24 is expected to be reduced from 319.6 mmt to 317.0 mmt or 12.48 bb, still the highest in five years.

SOYBEANS

May soybean prices got a modest boost in March but struggle to trade above $12.00 while Brazil's soybean crop is nearly 80% harvested. U.S. soybean exports in 2023-24 are down 18% from a year ago, below USDA's estimated pace. Adding bearish weight, USDA's report of 1.845 bb of soybean stocks as of March 1 was 13 mb above estimates.

On the bullish side, we've seen signs of increased demand from China the past month, a change that has dramatically narrowed the spread between cheaper FOB soybean prices in Brazil and those in the U.S. We also see crush demand continuing to stay a little above USDA's estimated pace, allowing room to offset some of the export disappointment.

With soybean prices in a tug of war, Dow Jones expects USDA to slightly increase its estimate of U.S. ending soybean stocks in 2023-24 from 315 mb to 319 mb, still the most in four years.

In South America, Dow Jones expects USDA to lower its production estimate for Brazil from 155.0 mmt to 151.7 mmt or 5.57 bb. It would be reasonable to see at least that much of a reduction from USDA, given the bulk of lower estimates, but USDA has been stubbornly resisting a lower number. Brazil's Conab estimates soybean production at 146.9 mmt or 5.40 bb and will have its own update Thursday morning. For Argentina, Dow Jones expects a production estimate of 50.2 mmt or 1.84 bb from USDA, still twice the size of last year's drought-afflicted crop. USDA's snapshot of world soybean stocks is expected to drop from 114.3 mmt to 112.6 mmt or 4.14 bb for 2023-24, the most in five years, if true.

WHEAT

With two months left in 2023-24, U.S. wheat export sales have almost reached USDA's 710 mb estimate already and shipments are on pace to come close by the time the season ends. USDA could leave its 673 mb ending stocks estimate unchanged for 2023-24, but March 1 wheat stocks of 1.087 bb were 34 mb above trade estimates and suggest demand has not been as active as USDA hoped. Dow Jones' survey expects USDA to raise its estimate of U.S. ending stocks from 673 mb to 685 mb, the most in three years.

At this time of year, traders are more interested in prospects for 2024-25 wheat production, but USDA will not make those estimates until the May WASDE report. Dow Jones survey does not expect much change in Thursday's world wheat estimates and neither do I. USDA's estimate of 258.8 mmt of world ending wheat stocks is expected to be trimmed to 258.6 mmt or 9.50 bb, the lowest in eight years.

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Join us at 12:30 p.m. CDT on Tuesday, April 11, as we discuss USDA's new estimates and what they mean for crop prices. We are also glad to take questions. For those busy at 12:30 p.m., there will be a link provided to replay the webinar at your convenience, but you need to register. Register here for Thursday's April WASDE report webinar: https://www.dtn.com/….

Todd Hultman can be reached at todd.hultman@dtn.com

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