Content ID

271406

U.S., World Grain Stocks Shrink, Pushing Up Soybean Market Thursday

Global demand pushes stocks lower.

DES MOINES, Iowa — The stockpiles of U.S. corn and soybeans dwindle, due to increased global demand, according to the USDA.

As a result, the CME Group’s farm markets jumped mostly.

At the close, the July corn futures finished 3/4¢ lower at $4.02. December futures finished even at $4.19.

July soybean futures closed 5 1/2¢ higher at $10.21.  November soybean futures settled 6 3/4¢ higher at $10.31.

July wheat futures closed 4¢ lower at $5.06.

July soy meal futures settled $0.30 per short ton higher at $386.10. July soy oil futures closed 0.10 higher at 31.13¢ per pound. 

In the outside markets, the NYMEX crude oil market is $0.26 higher, the U.S. dollar is lower, and the Dow Jones Industrials are 193 points higher.

 

U.S. 2017/18 Ending Stocks

In its May Supply/Demand Report Thursday, the USDA pegged the U.S. 2017/18 corn ending stocks at 2.18 billion bushels, compared with the trade’s expectations 2.170 billion bushels and the USDA’s estimate in April of 2.182 billion.

For soybeans, the U.S. 2017/18 ending stocks were estimated at 530 million bushels vs. the avg. trade estimate of 544 million and the USDA’s April estimate of 550 million.

The USDA pegged the U.S. 2017/18 wheat ending stocks at 1.070 billion bushels vs. the avg. trade estimate of 1.063 billion bushels and the USDA’s April estimate of 1.064 billion.

usda-ending-stocks-may-2018

U.S. 2018/19 Ending Stocks

In its May Supply/Demand Report Thursday, the USDA pegged the U.S. 2018/19 corn ending stocks at 1.682 billion bushels, compared with the trade’s expectations 1.620 billion bushels.

For soybeans, the U.S. 2018/19 ending stocks were estimated at 415 million bushels vs. the avg. trade estimate of 529 million.

The USDA pegged the U.S. 2018/19 wheat ending stocks at 955 million bushels vs. the avg. trade estimate of 963 million bushels.

World Crop Production

On Thursday, the USDA pegged Brazil’s 2017/18 corn production at  87.0 million metric tons, vs. the avg. trade estimate of 88.2 mmt. and the USDA’s April estimate of 92.0 mmt.

For soybeans, Brazil is expected to produce 117.0 mmt. vs. the avg. trade estimate of 116.5 mmt. and the USDA’s April estimate of 115.0 mmt.

For Argentina, USDA pegged its corn output at 33.0 million mt. vs. the avg. trade estimate of 32.1 mmt. and the USDA’s April estimate of 33.0 mmt.

Argentina’s 2017/18 soybean production is pegged at 39.0 mmt. vs. the avg. trade estimate of 38.6 mmt. and the USDA’s April estimate of 40.0 mmt.

usda-south-american-production-may-2018

World Ending Stocks

For 2017/18, the world corn stocks are pegged at 194.9 million mt. vs. the avg. trade estimate of 195.1 mmt. and USDA’s April estimate of 197.8 mmt.

Soybean ending stocks, globally, are pegged at 92.2 mmt. vs. 90.0 mt. trade estimate and USDA’s April estimate of 90.8 mmt.

The 2017/18 wheat global stocks are pegged at 270.5 mmt. vs. the avg. trade estimate of 271.1 mmt. and the government’s April estimate of 271.2 mmt.

For 2018/19 Ending Stocks

For 2018/19, the world corn stocks are pegged at 159.2 million mt. vs. the avg. trade estimate of 180.8 mmt.

Soybean ending stocks, globally, are pegged at 87.6 mmt. vs. 90.9 mt. trade estimate.

The 2018/19 wheat global stocks are pegged at 264.3 mmt. vs. the avg. trade estimate of 269.3 mmt.

Trade Reaction

Sal Gilbertie, Teucrium Trading owner, says that the report offers a few surprises.

“The surprising almost twenty-two percent drop in new crop soybean ending stocks definitely gave the bean market some legs and probably puts some of the tariff jitters on the sidelines, at least temporarily,” Gilbertie says.

Wheat took an initial price hit, until traders realized ending stocks are actually at a four year low and domestic usage is up in virtually all categories, Gilbertie says.

“New crop corn ending stocks were down almost twenty three percent, but the decline had been widely predicted and thus had little immediate impact on prices, although it will likely provide some price support for corn markets moving forward. All-in-all, this looks like a friendly report to the markets,” Gilbertie says.

Brian A. Rydlund, CHS Hedging Market Analyst, says that there are noo big surprises in USDA’s U.S. numbers.

“No surprise at home, carryouts came in near the guesses. USDA is using 174 bu./acre corn yield as a trendline. Corn still has a better story than beans do, going into summer. But, the bean story got interesting today,” Rydlund says.

“World carryouts got tighter on corn and soybeans, especially corn. The margin for production error has shrunk. We need a good U.S. crop this summer,” Rydlund says.

 

Read more about
Loading...

Talk in Marketing