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September Supply-Demand Summary


September S&D Highlights

September 12, 2018

Market Trend

Pre-Report Release Current (12:30)

Corn

-1 1/4 -10 -13

Soybeans

-3 3/4 -7 +4 1/2

Wheat

+6 1/4 -7 -16

U.S. Carry-Out

Aug 17/18 USDA Sep 17/18 Trade Sep 17/18 USDA Aug 18/19 USDA Sep 18/19 Trade Sep 18/19 USDA

Soybeans

430 418 395 785 836 845

Corn

2,027 2,014 2,002 1,684 1,590 1,774

Wheat

1,100 1,100 935 935 938 935

Sorghum

44 NA 49 40 NA 46

Cotton

4.40 NA 4.30 4.60 NA 4.70

U.S. Production (mbu)

2017 Final Aug 18/19 USDA Sep 18/19 Trade Sep 18/19 Range Sep 18/19 USDA

Corn

14,604 14,586 14,506 14,397-14,607 14,827

Soybeans

4,392 4,586 4,659 4,528-4,781 4,693

Sorghum

364 375 NA NA 376

Cotton

20.92 19.24 NA NA 4.70

World Ending Stocks (MMT)

Sep 17/18 USDA Sep 17/18 Trade Sep 17/18 USDA Aug 18/19 USDA Sep 18/19 Trade Sep 18/19 USDA

Corn

193.3 192.3 194.2 155.5 154.4 157.0

Wheat

273.1 272.7 274.4 259.0 257.2 261.3

Soybeans

95.6 95.2 94.7 105.9 107.5 108.3

September Supply-Demand Summary

CORN: Yield came in nearly 3 bushels per acre higher than last month to 181.3, 3.9 bpa above the average trade estimate. The 241 mbu increase in supply did find 125 million bushels in additional use with ending stocks rising 90 million to 1.774 billion, some 184 million ABOVE the average trade estimate; hence the sharply lower Board.

SOYBEANS: 18/19 ending soybean stocks came in at 845 mbu, just 9 million more than the average trade estimate, providing market support shortly after the report release. South American production changes were limited to a 800 K increase in Argentina’s 17/18 crop to 37.8 while export changes for the 17/18 campaign largely offset each other. China’s 17/18 imports were reduced 2 MMT to 94.0 and 18/19 were trimmed back 1 MMT to 94.0 as well. The report was supportive versus trade thinking but China remains the major wild card with some thinking imports could be as low as 83-85 MMT in the coming year.

WHEAT: Bearish amid larger-than-expected FSU-12 production (primarily Russia) and higher-than-expected world ending stocks. Negative corn price action also weighing on the market. There were no changes to the U.S. balance sheet. FSU-12 production was increased 3.5 MMT, with Russia accounting for 3.0 MMT. FSU-12 exports were left unchanged from last month, underscoring strong world competition. However, Australia crop size was lowered 2.0 MMT, with exports down a like amount. Could support Dec-May U.S. export prospects. While there is still uncertainty surrounding Australia and Argentina crop prospects, the overriding sentiment remains bearish due to ample world supplies.

DOMESTIC

Corn

New Crop:

  1. Yield jumped sharply from 178.4 bpa in August to 181.3 this month with the latter 3.9 bushels above the average trade estimate and exceeding the top end of the range (range: 176.0-178.6);
  2. Production rises 241 to 14.827 billion;
  3. Beginning stocks 25 lower;
  4. Imports unchanged at 50;
  5. Total supply increased 215;
  6. Feed/Residual use tweaked 50 mbu higher on the larger crop;
  7. FSI/ethanol use increased 25/25 from August—7.130/5.650 bbu;
  8. Export forecast increased 50 to 2.400 bbu
  9. Ending stocks raised 90 to 1.774 bbu for an 11.7% stx/use ratio (11.2%). Trade ideas had them pegged at 1.590 bbu (range: 1.210-1.747);
  10. USDA lowers expected producer price range $.10 to $3.00-$4.00.

Old Crop:

  1. Endings stocks down 25 to 2.002 billion;
  2. Changes to the 17/18 balance sheet were limited to a 25 mbu increase in the export forecast to 2.425 bbu:
  3. The 17/18 average price to producers was listed at $3.40, against last month’s $3.35-$3.45 range.
  4. Milo

    New Crop:

  1. Yield increased 0.2 bpa to 71.1;
  2. Production 1 mbu greater at 376 (364 LY);
  3. Beginning stocks 5 higher at 49;
  4. USDA leaves 18/19 demand unchanged;
  5. Ending stocks increase 6 to 46;
  6. Expected producer price range trimmed a dime at both ends, down to $2.80-$3.80 per bushel

Old Crop:

  1. Exports reduced 5 to 205 mbu;
  2. Carry-out increased 5 to 49;
  3. Producer price goes from $3.15-$3.25 range to a $3.25 price point.

Soybeans & Products

  • New Crop:
    1. Yield up 1.2 bpa to 52.8 ba;
    2. Supply: up 73 reflecting (a) 35 mbu lower stx and (b) 107 mbu larger crop;
    3. USDA adds 10 mbu to crush at 2.070 bbu;
    4. Exports unchanged at 2.060 mbu/China imports reduced 1 MMT to 94.0;
    5. 12 mbu increase in use well short of 73 supply boost with carry-out up 60 to 845 mbu. Stx/use ratio rises to 19.7% from 18.4% LM and 9.1% for 17/18
    6. Average producer price range declines $.30 to a $7.35-$9.85 range
  • Products:
    • SBO
      1. Ending stocks boosted 100 million pounds to 2.166 billion;
      2. Beginning stocks 15 mil lbs lower at 2.156 billion;
      3. Production rises 115 mil lbs from LM due to larger crush estimate;
      4. Domestic use steady at 22 billion pounds/7.8 billion for biodiesel;
      5. Export forecast steady at 2.2 billion;
      6. $.28-$.32 price range, unchanged from August
    • SBM
      1. Production 250 K ST greater at 48.950 million;
      2. Domestic use up 100 to 35.8 MST;
      3. Exports 150 K larger at 13.5 MST;
      4. Average SBM price $5 lower with a $290-$330 range.
  • Old Crop:
    1. 17/18 SB c/o 35 lower with crush up 15 from LM and exports, 20 higher;
    2. SBO: domestic use 200 mil lbs higher with biodiesel up 100 from LM
    3. SBO exports unchanged at 2.450;
    4. SBO ending stocks decline 15 million pounds;
    5. SBM: domestic meal use increased 100 K ST to 35.0 MST; exports increased 300 K

Wheat

>U.S. All Wheat Supply/Demand – 18/19

  • The next update of all wheat production will be released in conjunction with the USDA Small Grains Summary report, which is scheduled for release on Sep. 28;
  • Total supply of 3.112 bbu is unchanged from last month and up 1.1% vs. last year;
  • Usage—Food use unchanged vs. last month; feed/residual unchanged at 120; and exports steady at 1.025 bbu. Total use of 2.177 bbu is up 10.1% vs. 17/18;
  • Ending stocks of all wheat are forecast at 0.935 bbu, which was fractionally below the average trade guess of 0.938; average farm price forecast at $4.70-$5.50 vs. $4.60-$5.60 in August. The ending stocks-to-use ratio is forecast at 42.9%, unchanged from last month but below 55.6% in 17/18.

U.S. Supply/Demand by Class—18/19

  • Hard Red Winter
    • Imports down 5 mbu vs. August;
    • Domestic use is unchanged at 464 mbu;
    • Exports forecast at 375 mbu, down 20 million vs. August;
    • Carry-out projected at 409 mbu, up 15 million vs. last month;
    • Stocks-to-use forecast at 48.7% vs. 45.9% in August and 75.9% for 17/18
  • Soft Red Winter
    • Domestic use unchanged from last month at 214;
    • Exports forecast at 120 mbu—up 5 mbu vs. August;
    • Ending stocks forecast at 173 million, down 5 mbu vs. last month;
    • Stocks-to-use estimated at 51.8% vs. 54.1% in August and 67.0% for 17/18
  • Hard Red Spring
    • Exports projected at 295 mbu, up 10 from last month;
    • Carry-out projected at 252 mbu vs. 262 in August;
    • Stocks-to-use pegged at 42.9% vs. 45.4% last month and 36.9% for last year

GLOBAL

Coarse Grains/Corn

  • Beginning Coarse grain stx up 900 KT from LM to 223.6; ending 18/19 stx revised up 1.6 MMT to 184.8;
  • Beginning corn up 800 K to 194.2; ending 18/19 stx forecasted 1.5 MMT higher at 157.0;
  • 17/18 Comp corn exports
    • Argentina down 1 MMT to 23.0;
    • Brazil down 1 to 22.0;
    • RSA unchanged at 2.3;
    • FSU steady at 24.3
  • 18/19 comp corn exports
    • Arg steady at 27.0;
    • Brazil unchanged at 29.0;
    • RSA 100 K lower to 1.90 MMT:
    • FSU exports increased ½ MMT to 29.45, all Ukraine
  • China corn imports: 17/18 unchanged at 4.0 MMT; 18/19 steady at 5.0;
  • Major importers: 1 MMT increase in 17/18 forecast; 18/19 up 2 to 90.1 MMT;
  • Foreign wheat feeding 100 K higher at 61.2; 17/18 feeding reduced 800 K to 143.1

Soybeans

  • 17/18 global endings stx reduced 870 K from LM to 94.7; 18/19 boosted 2.3 to 108.4;
  • 17/18 Arg bean crop raised 800 K to 37.8; Brazil, no change at 119.5. 18/19 estimates unchanged at 57.0 and 120.5, respectively;
  • Arg 17/18 exports reduced 1 MMT to 2.15; Brazil, increased 1.2 to 76.7. No change in 18/19 estimates;
  • No changes in either 17/18 or 18/19 competitor meal exports;
  • CHINA BEAN IMPORTS—17/18 reduced 2 MMT to 94.0; 18/19 down 1 from LM to 94.0

Wheat

  • More changes to world production. Production for 18/19 increased 3.37 MMT to 733.0 MMT—down 25.3 MMT compared to last year’s record 758.3;
  • Carry-out for 17/18 increases 1.3 MMT vs. last month to 274.4 MMT;
  • World ending stocks for 18/19 now pegged at 261.3 MMT, which was well above the average trade guess of 257.2 and above the range of 252.0-261.0;
  • Updated production forecasts for competitors are mixed;
  • FSU-12 production forecast up 3.5 MMT from last month due primarily to a 3.0 MMT increase in Russia to 71.0 MMT (85.0 last year). Total FSU-12 exports estimate is unchanged at 61.0 MMT compared to last year’s record of 68.8.
  • Beginning stocks in the FSU-12 were up 1.4 MMT. After adjusting for a small decrease in imports, total supply increased 4.7 MMT from last month. The larger supply was absorbed by a 2.7 MMT increase in domestic use and a 2.0 MMT increase in ending stocks;
  • Australia crop was reduced 2.0 MMT to 20.0 with exports also lowered 2.0 MMT to 14.0. Some believe additional reductions in production (and exports) are possible given ongoing dry conditions in key production areas;
  • Canada production was reduced by 1.0 MMT to 31.5 MMT while exports were lowered by 500,000 MT to 24.0 MMT;
  • EU-27 crop was unchanged at 137.5 MMT with exports steady at 23.0 MMT;
  • Argentina production steady at 19.5 MMT with exports unchanged at 14.2.

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