Demand-Heavy WASDE Report Provides Initial Market Spike
Corn export demand has risen in the last month, and that's likely to push futures prices to a range of about 5 to 15 cents higher than a month ago, according to Wednesday's USDA-NASS World Agricultural Supply and Demand Estimates (WASDE) report.
"A 125-million-bushel increase in projected corn exports reduces corn ending stocks by the same amount," according to Wednesday's report. "Continued strong export sales and a rising weekly shipment pace for U.S. corn during March support the higher expected export level as does an increase in projected global corn demand."
After a quick price surge after the numbers' release, both old- and new-crop corn futures pulled back a bit but remained on the higher side minutes after USDA released the April WASDE report at 11:00 a.m. CDT.
- Get more analysis: USDA Report Summary
- See the full WASDE report
- Read more: USDA releases market-friendly data
- See how the trade's responding in Marketing Talk
USDA officials now estimate a slightly higher price range for corn moving into the next month: Last month, the price ranged from $4.25 to $4.75 per bushel, but based on the surge in demand and corresponding tightening of carryout, that range was bumped Wednesday to $4.40 to $4.80 a bushel.
For soybeans, Wednesday's data was just as bullish despite an upswing in imports to the tune of 65 million bushels. But exports also grew despite a resurgence in price in the last two months.
"Soybean exports for 2013/14 are increased 50 million bushels to 1.58 billion reflecting record year-to-date shipments and large outstanding sales," according to Wednesday's report. "Despite relatively high prices and record harvests in South America, U.S. exports have remained strong, especially to China, where imports from the U.S. have already exceeded the previous marketing-year record."
The story of the report, analysts say, is all about demand. Continued soybean imports aren't enough to slow down the bulls in that pit, says Teucrium Trading chief operating officer Steve Kahler.
"Today's USDA report showed a continued tightening of the U.S. soybean supply by increasing exports and seed use with a small increase on imports. Brazilian soybean production estimates declined slightly with few other changes to the world supply and demand situation," he says. "The demand for U.S. corn from exports remains strong, which enabled the USDA to reduce corn ending stocks to a level below the average of trade estimates."