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April Supply-Demand Summary


April Supply-Demand Summary

April 10, 2018

Corn: More or less a non-event as this month’s ending stocks estimate of 2.182 billion was only 7 million shy of the trade average.  The Argentine crop at 33.0 came in 300 K MT above the trade average (down 3 from last month) and Brazil at 92.0 was down 2.5 from last month but 2 higher than the trade average. Interesting the USDA scaled back South American corn exports 3 MMT but this had no impact on the old crop U.S. forecast and suggests more optimism for the 18/19 program.

SOYBEANS: Bean report was a mite friendly as the USDA’s 550 ending stocks forecast was 24 million below the trade average and down 5 from last month.  Seed/residual was tweaked 6 million lower while crush was boosted 10 million as the result of an improved outlook for both the domestic and export meal picture.  The Argentine crop was trimmed 7 to 40.0 (trade: 41.3) while Brazil was increased 2 to 115.0 (trade:  116.2). Note a 21 5 million pound build in oils stocks –higher crush/reduced biodiesel use/slight increase in SBO export forecast.

WHEAT: Somewhat negative with higher-than-expected U.S. ending stocks and yet another increase in exports from the FSU-12.  World carry-out for 2017/18 was also increased 2.3 MMT from last month.  U.S. feed/residual usage was lowered 30 mbu; result was a like increase in ending stocks to 1.064 bbu.  With the latest recovery in U.S. flat price, export competition likely to be strong throughout the remainder of spring.  Key now will be northern hemisphere weather, in particular U.S. winter wheat prospects and spring wheat planting conditions.  Dryness remains in the short-term forecast for most Plains HRW areas, while HRS areas in the Northern Plains are projected to stay cold and wet.

Market Trend

Pre-Report Release Current (12:15)

Corn

-1 to -2 0 -3/4

Soybeans

+10 +13 To +14 +8 To +9

Wheat

-6 To -7 -6 To -7 -3/4 To -1 3/4

U.S. Carry-Out

Mar 16/17 USDA Apr 16/17 USDA Mar 17/18 USDA Apr 17/18 Trade April 17/18 USDA

Soybeans

302 302 555 574 (545-625) 550

Corn

2,293 2,293 2,127 2,189 (2,067-2,265) 2,182

Sorghum

33 33 24 NA 29

Wheat

1,181 1,181 1,024 NA 1,064

Cotton

2.75 2.75 5.50 NA 5.3

South America Production (MMT)

Mar 16/17 USDA Apr 16/17 USDA Mar 17/18 USDA Apr 17/18 Trade April 17/18 USDA

Soybean

Argentina

57.8 57.8 47.0 41.3 (38.9-46.0) 40.0

Brazil

114.1 114.1 113.0 116.2 (113.0-119.0) 113.0

Paraguay

10.7 10.7 9.2 NA 9.2

Corn

Argentina

41.0 41.0 36.0 32.7 (29.0-55.5) 33.0

Brazil

98.5 98.5 94.5 90.0 (86.0-94.0) 92.0

South Africa

17.5 17.6 13.0 NA 13.2

World Ending Stocks (MMT)

Mar 16/17 USDA Apr 16/17 USDA Mar 17/18 USDA Apr 17/18 Trade April 17/18 USDA
Corn 231.9 230.9 199.2 197.1 (191.5-202.0) 197.8
Soybeans 96.7 96.7 94.4 92.9 (91.0-96.0) 90.8
Wheat 252.6 254.6 268.9 268.4 (266.5-270.0) 271.2

Corn

  • Ending 17/18 corn stocks were increased by 55 million to 2.182 bbu (trade: 2.189)
  • Feed/residual consumption was reduced 50 million as a result of the March 1 stocks report which showed higher than expected inventory levels;
  • The USDA made a modest 5 mbu reduction to its non-ethanol FSI use, which is now at 1.465 billion;
  • Ethanol grind remains estimated at 5.575 billion;
  • Exports were unchanged this month at 2.225 billion, despite smaller crops in both Argentina and Brazil;
  • The expected range on producer prices narrowed in $.05 at both ends of the range, from $3.15-$3.55 in March, to $3.20-$3.50 this month.

Sorghum

  • Carry-out 5 higher at 29 million;
  • Feed/residual unchanged at 80 (130 LY);
  • FSI consumption reduced 5, to 45 million;
  • Total domestic use down 5 million to 145 (241 LY);
  • Exports steady at 245 (241 LY);
  • Producer price range $.10 higher on the lower end, for a $3.05-$3.35 per bushel range.

Soybeans

  • Carry-out down 5 to 550 (trade: 574);
  • Crush increased 10 million to 1.970 billion due to increases in both meal exports and domestic consumption;
  • Exports unchanged at 2.065 bbu as USDA refrains from commenting on the implications of the China-U.S. trade spat (or, no impact in the short term?);
  • Seed use down 3 and residual use also 3 million lower to 30 (34 LY);
  • Average farm price: $9.10-$9.50, against $9.00-$9.60 LM and $9.47 LY.
  • SBM balance sheet
    • Domestic meal use increased 250 K ST to 34.55 MST (33.399 LY);
    • Exports increased 100 K ST to 12.5 MST (11.6 LY);
    • $340-$360 price range, against $325-$355 LM and 316.88 LY
  • SBO
    • Production increased 115 million pounds on the larger crush estimate;
    • Food/feed/industrial use steady at 13.8 billion pounds;
    • Biodiesel use lowered 200 million pounds to 7.0 bil lbs (6.2 LY);
    • Exports 100 million higher to 2.0 billion on recent active sales/shipment pace (2.56 LY);
    • Ending stocks rise 215 million to 1.966 billion pounds;
    • 30 ½ to 32 ½ cent price range, versus 30-33 LM and 32.48 LY.

 

WHEAT

U.S. All Wheat Supply/Demand—17/18

  • Imports unchanged at 155 mbu;
  • Feed/residual usage was lowered 30 mbu to 70 mbu;
  • Exports were unchanged at 925 mbu—down 130 million (12%) vs. last year;
  • Carryout for 17/18 of all wheat increased 30 mbu to 1.064 bbu, which was 28 mbu above the avg. trade guess of 1.036 and above the top end of the range of 0.989-1.060;
  • farm price forecast range was unchanged from last month at $4.60-$4.70; stocks-to-use is forecast at 52.9% compared to 50.6% in March and 53.2% last year

 

U.S. Supply/Demand by Class—17/18

  • Hard Red Winter
    • Domestic use lowered 25 mbu to 432 mbu—down 12% vs. last year;
    • Exports lowered 10 mbu to 370, which is down 19% vs. 16/17;
    • Carryout for 17/18 increased 35 million to 545 mbu vs. 589 for 16/17;
    • Stocks-to-use for 17/18 pegged at 68.0% vs. 62.5% for 16/17
  • Soft Red Winter
    • Imports lowered 3 mbu compared to last month;
    • Domestic use unchanged at 209 mbu—down 8% vs. last year;
    • Export forecast unchanged at 90 mbu, down 2% vs. 16/17;
    • Ending stocks for 17/18 reduced 3 mbu to 225 million vs. 215 for 16/17;
    • Stocks-to-use for 17/18 pegged at 75.3% vs. 67.2% for 16/17
  • Hard Red Spring
    • Domestic use lowered 5 mbu to 269 mbu—up 8% vs. a year ago;
    • Exports unchanged at 235 mbu, which is 27% lower vs. 16/17;
    • Carryout for 17/18 up 5 million to 190 mbu vs. 235 a year ago;
    • Stocks-to-use for 17/18 pegged at 37.7% vs. 41.2% for 16/17

 

WORLD

Coarse Grains/Corn

  • Global coarse stocks estimate lowered 2.14 MMT to 224.9 (264 LY);
  • Ending corn stocks reduced 1.4 million to 197.8 (230.90 LY);
  • USDA cuts domestic wheat feeding 30 mbu to 70 million (156 LY); Foreign wheat feeding increased nearly 2 MMT to 143.8 MMT (142.9 LY);
  • Foreign corn exports lowered 3 MMT to 58.7 (59.8 LY);
  • Arg crop down 3 to 33.0 (41.0 LY); Brazil crop reduced 2.5 MMT to 92.0 (98.5 LY); South African crop up 200 K to 13.2 MMT (17.6 LY); slight (100 K) drop in FSU to 41.93 (47.3 LY);
  • South AM exports 3 lower (Arg, down 1 to 24.0); Brazil, off 2 to 33.0. Former compares to 26 LY and the latter, 31.6
  • No changes to the China corn balance sheet—imports remain at 4 MMT; ending stocks unchanged at 79.6.

 Soybeans/SBM/SBO

  • SB Production—about a wash versus trade ideas
    • Argentina down 7 to 40.0 (trade was expecting 41.3);
    • Brazil crop up 2 to 115.0 (trade was expecting 116.2);
    • Paraguay steady at 9.2.
  • Exports
    • Argentina’s exports were sliced about 40% (2.6 MMT), down to 4.2 million (7.0 LY);
    • Brazil’s exports were boosted 2.6 MMT to 73.1 (63.1 LY);
    • Paraguay continues to be estimated at 5.8 (6.1 LY)
  • Crush
    • Argentina crush lowered 1.8 to 41.2 (43.3 LY);
    • Brazil crush held steady at 43 MMT (40.9 LY);
  • SB imports increased 440 K MT with Mexico accounting for 150 K of the increase
  • SBM Exports
    • Argentina down 1.3 MMT to 29.5 (31.3 LY);
    • Brazil up 200 K to 15.45 (13.76 LY);
    • India lowered 100 K to 1.6 (2.0 LY);
    • S. upped 90 K to 11.34 (10.52 LY);
  • China SB import forecast continues at 97.0 (93.5 LY)
  • Global stocks to fall 3.6 MMT from LM to 90.8 million, a near 6 MMT decline from 16.17

WHEAT

  • World production for 17/18 pegged at a record8 MMT, which is up 0.960 MMT vs. March;
  • FSU-12 production increased 0.020 MMT to 142.8 MMT. However, exports from all FSU-12 destinations were increased 1.5 MMT to 64.8 MMT due to larger shipments from Russia (up 1.0 MMT from March) and Kazakhstan (+0.5).  This is a record FSU-12 export forecast and up 19% from 16/17;
  • Australia production unchanged at 21.5 MMT (vs. a record 30.4 MMT last year) with exports steady at 16.0 (22.6 last year);
  • Argentina crop size steady at 18.0 MMT, but exports were increased 0.3 MMT to 12.8 (13.8 last year);
  • India crop size steady at 98.5, but ending stocks increased 0.690 MMT to 12.0 MMT (9.8 last year) due to a decline in domestic use;
  • Canada’s production estimate was unchanged at 30.0 MMT, and exports were steady at 22.5 (20.2 in 16/17);
  • EU production steady at 151.6 MMT but exports reduced by 1.0 MMT to 24.0 (vs. 27.3 last year);
  • China imports were steady at 4.0 (vs. 4.4 MMT last year);
  • World ending stocks for 17/18 were increased 2.3 MMT to 271.2, which was well above the average trade guess of 268.4. Ending stock-to-use ratio for 17/18 is projected at 36.5% vs. 36.2% in March and 34.5% last year.

Regards,

Larry/Brian

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