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December Supply-Demand Summary


December S&D Highlights

December 11, 2018

Market Trend

Pre-Report At Release Current (12:15)

Corn-CH

-1 -1 1/4 -1/4

Soybeans-SF

unch to +1/4 +2 +4

Wheat-WH

unch to +1/4 -2 -5

U.S. Carry-Out

Nov 17/18 USDA Dec 17/18 USDA Nov 18/19 USDA Dec 18/19 Trade Dec 18/19 Range Dec 18/19 USDA

Soybeans

438 438 955 938 802-1,033 955

SBO

1,990 1,990 1,915 NA NA 1,915

Corn

2,140 2,140 1,736 1,744 1,585-2,058 1,781

Wheat

1,099 1,099 949 969 924-1,025 974

Sorghum

35 35 39 NA NA 39

Cotton

4.30 4.30 4.30 NA NA 4.40

South American Production

Nov 17/18 Dec 17/18 Nov 18/19 Trade 18/19 Range Dec 18/19

Arg Corn

32.0 32.0 42.5 41.0-43.0 42.5

Brazil Corn

82.0 82.0 94.5 92.2-98.0 94.5

Brazil CONAB

80.8 90.5 91.1

Arg SB

37.8 37.8 55.5 54.0-57.0 55.5

Brazil SB

119.8 120.3 120.5 119.0-124.0 121.1

World Ending Stocks (MMT)

Commodity Nov 17/18 USDA Dec 17/18 USDA Nov 18/19 USDA Dec 18/19 Range Dec 18/19 USDA

Wheat

279.0 279.9 266.7 265.0-270.0 268.1

Coarse Grains

369.8 369.3 334.2 NA 335.2

Corn

340.9 340.2 307.5 304.2-312.0 308.9

Soybeans

99.7 101.3 112.1 112.0-114.4 115.3

December Supply-Demand Summary

CORN: A smidgeon negative as the USDA increased carry-out 45 mbu to 1.781 bbu. The trade average was 1.744 bbu. Changes of note came from a not-unexpected 50 mbu decline in ethanol grind and overseas, a 1.5 MMT/1.0 MMT increase in Ukraine corn production/exports. The USDA did narrow in its expected price range, from $3.20-$4.00 in November, to $3.25-$3.95 this month. No change in this month’s South American estimates for 18/19 although 17/18 crop year Brazilian corn exports were 1.5 MMT higher to 23.5.

SOYBEANS: No changes to the U.S. bean balance sheet, ending stocks are still at 955 and exports, 1.9 bbu. The expected range for average farm prices did narrow in from $7.60-$9.60 LM, to a $7.85-$9.35 range this month. The USDA DID find more beans in Brazil, with last year’s crop increased ½ MMT to 120.3 and the crop that’s almost planted was bumped 1 ½ MMT higher to 122.0 with exports soaring 4 MMT to 81.0 (76.2 for 17/18). USDA still expecting China to import 90 MMT.

WHEAT: Summary: Slightly bearish as U.S. and world ending stocks were above expectations. Australia crop size was reduced 0.5 MMT to 17.0 MMT but Argentina was unchanged at 19.5 MMT. U.S. export forecast was lowered 25 mbu, which the USDA noted was a result of “historically low” exports of HRW in the first half of the crop year. Today’s reduction in U.S. exports combined with ongoing uncertainty about production estimates in Australia and Argentina could lead to a continuation of choppy trading.

DOMESTIC

Corn

  • Ending stocks increased 45 mbu;
  • Imports 5 lower at 45;
  • Ethanol grind 50 million lower at 5.6 billion;
  • Exports and feed/residual use unchanged at 2.450 and 5.5 bbu;
  • The average producer price range went from $3.20-$4.00 to $3.25-$3.95.

Milo

  • Feed/residual increased by 15 to 150 million (poor export demand?);
  • FSI use reduced by 15 to 110 mbu;
  • Exports steady at 100;
  • Ending stocks unchanged at 39 million;
  • The average producer price range narrowed from $3.00-$3.80 LM, to $3.05-$3.75.

Soybeans & Products

  • Soybean carry-out unchanged at 955
  • Producer price range at $7.85-$9.35, versus $7.60-$9.60 LM and $9.33 LY;
  • SBM:
    • No changes in production nor use;
    • Expected price range sharply unchanged at $290-$330 ($345 LY).
  • SBO:
  • Likewise, no changes to any of the S&D components;
  • Expected price range remains at $.28-$.32 ($.3004 LY).
  • Wheat

    U.S. All Wheat Supply/Demand – 18/19

    • Updated production estimates from the USDA Small Grains Summary report released on Sep. 29 will be incorporated until the final report on January 11;
    • Total supply of 3.123 bbu was unchanged vs. last month;
    • Usage—Food, seed use and feed/residual unchanged vs. last month; however, exports were reduced 25 mbu to 1.0 bbu. Total use of 2.149 bbu is still up 8.6% vs. 17/18;
    • Ending stocks of all wheat are forecast at 0.974 bbu vs. the average trade guess of 0.969; average farm price forecast at $5.05-$5.25 vs. $$4.90-$5.30 in November. The ending stocks-to-use ratio is forecast at 45.3% vs. 43.7% last month and 55.5% in 17/18.

    U.S. Supply/Demand by Class—18/19

    • Hard Red Winter
      • Imports increased 2 mbu vs. November;
      • Domestic use is unchanged at 460 mbu;
      • Exports forecast at 320 mbu, down 40 million vs. November;
      • Carry-out projected at 468 mbu, up 42 million vs. last month;
      • Stocks-to-use forecast at 60.0% vs. 52.0 in November and 75.9% for 17/18
    • Soft Red Winter
      • Imports decreased 2 mbu vs. November;
      • Domestic use unchanged from last month at 210;
      • Exports forecast at 130 mbu—up 10 million vs. November;
      • Ending stocks forecast at 157 million, down 12 mbu vs. last month;
      • Stocks-to-use estimated at 46.2% vs. 51.2% in November and 67.0% for 17/18
    • Hard Red Spring
      • Domestic use unchanged from last month at 295 mbu;
      • Exports projected at 300 mbu, up 5 million from November;
      • Carry-out projected at 255 mbu vs. 260 in November;
      • Stocks-to-use pegged at 42.9% vs. 44.1% last month and 37.0% for last year

    GLOBAL

    Coarse Grains/Corn

    • Foreign coarse grain production virtually unchanged from LM at 988.50; 15.45 MMT greater than LY:
    • Global coarse grain ending stocks increased 1.05 MMT to 335.2 (369.3 LY);
    • Overseas wheat feeding increased 1 MMT to 139, a 7.3 MMT decline from LY;
    • Foreign corn production up 960 K MT TM to 728 (705 LY); ending stocks 150 K MT higher at 263.6 (285.8 LY);
    • Production changes: South Africa, down 1 MMT to 12.0 due to dryness/expected reduction in area planted; EU, up 900 K to 60.4 (larger Romanian crop); Canada, 600 K lower to 13.9 MMT; China, no change; FSU/Ukraine raised 1.5 MMT to 35.0;
    • Export changes: Mexico lowered 200 K to 1.5 MMT; Ukraine 1 MMT higher to 280 (18.5 LY); note the USDA upped its 17/18 Brazilian corn export forecast 1.5 MMT to 23.0;
    • Import changes: Japan, up ½ MMT; SE Asia, 1 MMT higher;
    • No change in China TM—production, exp/imp, end stocks all steady.

    Soybeans

    • 18/19 global bean ending stocks increased 3.25 MMT to 115.3 which is a 14 MMT/13.8% increase from last year;
    • As noted 17/18 Brazil crop raised ½ MMT to 120.3 and TY’s increased 1 ½ MMT to 122.0;
    • Export changes—18/19 Argentina down 3 to 5 MMT and versus 17/18 at 2.11; 18/19 Brazil shipments increased 4 MMT to 81.0, 4.8 MMT MORE than the current campaign;
    • Import changes . . . 190 K increase for 18/19, mostly smaller importers;
    • BWT, the 3 MMT slice to Argentine SB exports all went into ending stocks, now estimated at 41.3 MMT, versus 34.5 this year;
    • USDA sticks with its 90 MMT Chinese SB import forecast for 18/19 and 94.1 for LY

    World Wheat Supply/Demand – 18/19

    • Production for 17/18 decreased 100,000 MT to 733.4 MMT compared to last year’s record of 763.1;
    • Carry-out for 17/18 increases 940,000 MT vs. last month to 279.9 MMT;
    • World ending stocks for 18/19 now pegged at 268.1 MMT with the stocks-to-use ratio at 36.0% vs. 35.8% in November and 37.6% in 17/18;
    • Updated production forecasts for competitors are mixed;
    • FSU-12 production forecast was unchanged from last month at 124.5 MMT. Total FSU-12 exports estimate was increased 1.5 MMT to 62.5 MMT due to a 1.5 MMT increase in Russia exports. Russia exports are now forecast at 36.5 MMT compared to 41.4 MMT last year;
    • Australia crop was reduced 0.5 MMT to 17.0, although exports were lowered 1.0 MMT to 10.5 MMT (14.0 last year);
    • Canada crop was increased 0.3 MMT to 31.8 MMT exports were steady at 24.0 MMT);
    • EU production was steady at 137.6 but exports were lowered by 1.0 MMT to 22.0;
    • Argentina production steady at 19.5 MMT and exports were unchanged at 14.2 MMT

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