Market Analysis

The Ag Department’s S. American production updates and their impacts on the world carryover levels had the biggest immediate impact on the market’s reaction to April’s USDA reports released this week. Conab, Brazil’s Ag Ministry, advanced their corn and soybean output levels to 91.5 and 110 mmt before the USDA’s updates were released. The latest FSA projections were higher than these levels and last month. Interestingly, only modest changes were made to the three major crops ending stocks with no adjustment in any current US export forecast being done despite larger world supplies.

In corn, the World Board shrunk US feed demand by 50 million after last month’s 82 million larger-than-expected March 1 stocks. However, they also upped their ethanol usage level by 50 million because of this year’s first half 3.7% jump in ethanol grind usage. With both sales and shipments running ahead of the 5-year average paces, no monthly change in corn’s US exports were made despite the USDA’s 2 mmt rise in Brazil’s crop to 93.5 mmt. Over-all, corn’s US carryover was left unchanged at 2.32 billion bu. while the USDA’s world stocks rose 2.3 mmt.

In soybeans, the USDA dropped its residual by 19 million bu. in response to the higher March stocks, but they also upped seed usage by 9 million bu. to reflex 6 million larger US planting intentions. Despite, the 3 mmt rise in Brazil’s crop to 111 mmt., the USDA left its US exports unchanged when it upped China’s imports by 1 mmt and current sales are already at this year’s 2.25 billion bu. forecast for 2016/17 with 5 months left in a crop year. Overall, the USDA increased beans US stocks by 10 million to 445 million.

In wheat, the USDA sliced it feed demand because of a 28 million bu higher March stocks and February export shipments than the trade was expecting, The USDA also dropped imports by 5 million which prompted the USDA’s ending stocks to rise 30 million to 1.259 billion bu.