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October Supply-Demand Summary


October S&D Highlights

October 11, 2018

Market Trend

Pre-Report At Release Current (12:15)

Corn

-2 1/2 +7 +6

Soybeans

-4 +8 +5

Wheat

-1 +7 -2 to -4

U.S. Production (mbu)

Sep 17/18 USDA Oct 17/18 USDA Sep 18/19 USDA Oct 18/19 Trade Oct 18/19 Range Oct 18/19 USDA

Soybeans

4,392 4,392 4,693 4,733 4,623-4,890 4,690

Yield

49.1 49.1 52.8 53.4 52.0-55.0 53.1

Harv

89.5 89.5 88.9 88.7 88.4-88.9 88.3

Corn

14,604 14,604 14,827 14,851 14,700-14,969 14,778

Yield

176.6 176.6 181.3 181.8 180.6-183.0 180.7

Harv

82.7 82.7 81.8 81.7 81.4-81.9 81.8

Sorghum

364 364 376 NA NA 382

Cotton

20.92 20.92 19.68 NA NA 19.76

U.S. Carry-Out

Sep 17/18 USDA Oct 17/18 USDA Sep 18/19 USDA Oct 18/19 Trade Oct 18/19 Range Oct 18/19 USDA

Soybeans

395 438 845 903 442-975 885

Corn

2,002 2,140 1,774 1,932 1,774-2,352 1,813

Wheat

1,100 1,099 935 950 895-997 956

Sorghum

49 35 46 NA NA 5.0

Cotton

4.30 4.3 4.70 NA NA 5.0

South American Production

Sep 17/18 USDA Oct 17/18 USDA Sep 18/19 USDA Oct 18/19 USDA

Arg Corn

32.0 32.0 41.0 41.0

Brazil Corn

82.0 82.0 94.5 94.5

Conab

81.4 80.8 NA 89.7-91.1

Arg SB

37.8 37.8 57.0 57.0

Brazil SB

119.5 119.8 120.5 120.5

Conab

119.3 119.3 NA 117.1-119.4

World Ending Stocks (MMT)

Commodity Sep 17/18 USDA Oct 17/18 USDA Sep 18/19 USDA Oct 18/19 Trade Oct 18/19 USDA

Wheat

274.4 274.9 261.3 261.4 260.2

Corn

194.2 198.2 157.0 159.3 159.4

Soybeans

94.7 96.7 108.3 109.5 110.0

October Supply-Demand Summary

CORN: USDA’s 6/10’s of a bushel cut in yield to 180.7 provided the trade with a bit of a shock as the market had penciled in a ½ bpa INCREASE. The USDA’s 1.813 bbu ending stocks forecast came in 119 mbu BELOW the average trade estimate, giving the market a nice little pop for the time being. A modest reduction in feed/residual use was made as a result of the smaller crop; FSI use held steady from LM and exports were raised 75 mbu on “improved U.S. price competitiveness” (note Unknown cancelled 140 K MT prior to the report) and smaller exports expected from Russia.

SOYBEANS: The USDA raised its yield estimate to 53.1 bpa, or about one-half the amount expected by the trade. That, and a near-600 K reduction in acreage were the saving grace in keeping the USDA’s carry-out forecast from edging ever closer to 950 mbu. No significant changes to either the South American production outlook and Chinese bean demand was unchanged from September.

WHEAT: Neutral but finding spillover support primarily from strength in corn. World ending stocks of wheat were slightly below expectations, while U.S. carry-out was in line with the average trade estimate. Australia crop size was lowered 1.5 MMT and Russia output was decreased 1.0. There are ideas Australia crop could decline further. Nothing bullish in the wheat numbers overall, but market is likely to take its cue from trends in corn short-term.

DOMESTIC

Corn

Old Crop:

  • Ending stocks were up 138 mbu from LM to 2.140 billion, reflecting the September 1 stocks report;
  • Exports were increased 13 to 2.438 billion;
  • Feed/residual use reduced 148 million to 5.302 bbu;
  • FSI use 6 lower at 7.054 with ethanol grind mbu higher at 5.601 billion;
  • Average produce price point estimate slipped $.04 to $3.36/bushel.

New Crop:

  • 18/19 Planted area steady at 89.1 million;
  • Harvested area unchanged at 81.8 million;
  • Yield reduced 6/10’s to 180.7;
  • Production down 49 mbu to 14.778 bbu;
  • Beginning stocks 138 mbu higher;
  • Feed/residual estimate reduced 25 to 5.550 bbu;
  • FSI use estimate steady from LM at 7.130 bbu with ethanol grind flat from LM at 5.650 bbu;
  • Exports raised 75 to 2.475 bbu;
  • Total use up 50 mbu to 15.155 (14.793 LY);
  • The net being a 39 mbu increase in c/o from LM to 1.813 bbu;
  • Average producer price range unchanged at $3.00-$4.00

Milo

  • Planted area reduced 200 K to 5.8 million;
  • Harvested acreage 200 K lower at 5.1 million;
  • Yield up 3.9 bpa to 75.0;
  • Production rises 6 to 382 mbu;
  • 17/18 usage adjustments
    1. Feed/residual, up 15;
    2. Exports, unchanged at 205;
    3. FSI, down 1 to 59;
    4. Total use up 14 to 364 with ending stocks 14 million lower at 35
  • 18/19 use
    1. Feed/residual, 25 million higher;
    2. FSI, no change at 125;
    3. Exports, 25 million lower to 150;
  • Ending 18/19 stocks down 9 from LM to 37 mbu
  • Producer price range unchanged $2.80-$3.80.

Corn Yield Adjustments: Versus September, Yield changes found IL down 2 to 212; IN rose 2 to 194; IA was 2 lower to 204; KS slipped 1 to 130; MN held at 191; MO increased 4 to 142; NC was down 5, to 117; ND increased 4 to 146; OH was 2 higher at 190; SD lost 1 to 172 and WI remained at 179 bpa.

Soybeans & Products

  • Planted area down 500 K acres to 89.1 million;
  • Harvested area 600 K smaller at 88.3;
  • Yield increased 3/10’s to 53.1 (49.3 LY);
  • Production sharply unchanged (down 3) to 4.690 bbu;
  • 17/18 Use revisions
    • Crush unchanged at 2.055 bbu;
    • Exports down 1 to 2.129;
    • Seed/Residual down 24;
  • Old crop supply was increased 19 million (crop up 19). Net was a 25 mbu reduction in demand with ending stocks 43 million greater than appeared in the September WASDE;
  • 18/19
    • Crush, unchanged at 2.070 bbu;
    • Exports, steady from LM at 2.060 bbu;
    • Imports, no change at 25 mbu;
    • Seed/residual, steady at 137 mbu;
  • Average producer 18/19 soybean price continues in a $7.35-$9.85 range;
  • SBM: USDA reduced 17/18 domestic use 200 K ST; increased exports 500. 18/19 domestic use steady at 35.8 MST; exports continue to be forecast at 13.50 MST;
  • Average 18/19 SBM Prx remains in a $290-$330 range, versus $345.02 in 17/18;
  • SBO: Old crop stocks revised 50 million higher to 2.206 billion
    • Supply down up 150 million on production;
    • Dom use up 100 mil lbs—biodiesel;
    • Exports unchanged at 2.45 billion
  • 18/19 SBO:
    • Beg stx, up 50 mil lbs;
    • Production, unchanged;
    • Imports, steady at 300 mil lbs;
    • Supply, 50 million pounds larger;
  • Use:
    • Domestic use unchanged from LM at 22.1 billion;
    • Exports remain forecast at 2.2 billion:
  • Ending stocks 50 mil lbs lower from LM to 2.116;
  • Prices:
    • 17/18 average revised 4 points higher to $.3004;
    • 18/19 forecast continues in a $.28-$.32 range.

Soybean Production: This month saw some major acreage adjustments with AR down 320; IN was 250 K lower; IL, KS, KY and WI were each 100 K lower from LM with LA off 60 and SD & TN each reduced by 50 K. On the plus side, ND was up 300 K; NE gained 200 and MO, 50. The net change from last month was a 514 K reduction in total acres harvested.

Wheat

U.S. All Wheat Supply/Demand – 18/19

  • Updated production estimates from the USDA Small Grains Summary report were incorporated in this report— all wheat output up 7 mbu from Sep WASDE to 1.884 bbu;
  • Total supply of 3.123 bbu is up 11 mbu from last month and up 1.5% vs. last year;
  • Usage—Food and seed use unchanged vs. last month; feed/residual lowered 10 mbu to 110; and exports steady at 1.025 bbu. Total use of 2.167 bbu is up 9.5% vs. 17/18;
  • Ending stocks of all wheat are forecast at 0.956 bbu, which was in line with the average trade guess; average farm price forecast at $4.80-$5.40 vs. $4.70-$5.50 in September. The ending stocks-to-use ratio is forecast at 44.1% compared to 42.9% last month but below 55.5% in 17/18.

U.S. Supply/Demand by Class—18/19

  • Hard Red Winter
    • Production increased 1 mbu per Small Grains Summary report;
    • Domestic use is lowered 5 mbu to 459 mbu;
    • Exports forecast at 365 mbu, down 10 million vs. September;
    • Carry-out projected at 424 mbu, up 15 million vs. last month;
    • Stocks-to-use forecast at 51.5% vs. 48.7% in September and 75.9% for 17/18
  • Soft Red Winter
    • Production lowered 6 mbu per Small Grains Summary report;
    • Domestic use reduced 5 mbu from last month to 209;
    • Exports forecast at 120 mbu—steady vs. September;
    • Ending stocks forecast at 170 million, down 3 mbu vs. last month;
    • Stocks-to-use estimated at 51.7% vs. 51.8% in September and 67.0% for 17/18
  • Hard Red Spring
    • Production increased 4 mbu per Small Grains Summary report;
    • Domestic use unchanged from last month at 292 mbu;
    • Exports projected at 295 mbu, steady vs. last month;
    • Carry-out projected at 261 mbu vs. 252 in September;
    • Stocks-to-use pegged at 44.5% vs. 42.9% last month and 37.0% for last year

GLOBAL

Coarse Grains/Corn

  • Virtually no change in overseas wheat feeding for both 17/18 and 18/19 with TY at 137.3 MMT and LY at 152.6;
  • Foreign coarse grain ending 17/18 stocks increased 3.6 MMT to 227.2;
  • Ending 18/19 stocks 1.2 MMT higher at 185.9 for a net reduction of 41.3 MMT this year;
  • Overseas ending corn stocks estimate increased 1.3 MMT from LM to trimmed 1.5 to 113.9 (143.8 LY);
  • No change in 17/18 nor 18/19 S Am production estimates; South Africa’s 17/18 corn crop was trimmed 270 K to 13.53 MMT; this year’s crop remain estimated at 13.0;
  • Old crop exports: no change from LM; new crop . . . Black Sea shipments reduced 1 MMT to 28.45 (24.46 LY, up 200 K), due to an apparently smaller Russian forecast;
  • No adjustments to the PRC balance sheet with production steady at 225 (216 LY) and ending stocks at 58.5 (79.6 LY);
  • Foreign corn imports edge up 850 K to 153.5; a 5.9 MMT increase over 17/18. However, foreign corn exports at 100.1 MMT are up 15 from LY.

Soybeans

  • 18/19 beginning world stocks rise 1.9 MMT to 96.7; ending stocks 1.8 MMT higher TM to 110.0;
  • China: no change . . . 17/18 imports/crush remain at 94.0 & 90; 18/19 at 94.0 & 93.50;
  • Slight (500 K MT) reduction in 17/18 Brazil exports (production 300 K greater at 119.8), Arg exports continue at 2.1;
  • No adjustments to 18/19 S AM . . . Arg exports, 8.0 (2.1); Brazil, 75.0 (76.2); Paraguay, 5.9 (6.2);
  • Minor change in non-PRC 18/19 SB import outlook; the net is non-PRC imports are expected to be up 1.8 MMT/65 mbu.

Wheat

  • World Wheat More changes to world production. Production for 18/19 decreased 2.1 MMT to 730.9 MMT — down 3.4% from last year’s record 758.7;
  • Carry-out for 17/18 increases 490,000 MT vs. last month to 274.9 MMT;
  • World ending stocks for 18/19 now pegged at 260.2 MMT with the stocks-to-use ratio at 34.9% vs. 35.0% in September and 37.1% in 17/18;
  • Updated production forecasts for competitors are lower;
  • FSU-12 production forecast down 1.0 MMT from last month due to a decrease in Russia to 70.0 MMT (85.0 last year). Total FSU-12 exports estimate is unchanged at 61.0 MMT (vs. a record 68.6 last year);
  • Australia crop was reduced 1.5 MMT to 18.5 with exports lowered 1.0 MMT to 13.0 (14.5 last year);
  • EU-27 crop unchanged at 137.5 and exports steady at 23.0 MMT (23.3 last year);
  • Canada production steady at 31.5 with exports unchanged at 24.0 (22.0 last year);
  • Argentina production steady at 19.5 MMT with exports unchanged at 14.2

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