Traders are obviously eager to see just how much higher the ending stocks for corn and soybeans are going to jump following the March 28 Quarterly Stocks Report. Just remember WASDE and NASS don't always see eye to eye. Meaning we may not see ending stocks jump nearly as high as many are anticipating.
Let’s also keep our eye on the USDA's estimate for Chinese soybean imports. Currently they are estimating China will import 63 million metric tons. There is some talk this number could eventually be drastically reduced sub-60 million. I doubt we see anything like this in this report, but it wouldn't surprise me to see the USDA make a 1-2 million ton cut.
Wheat stocks here in the U.S. seem as if they are also wanting to inch a little higher from the previous estimate of 716 million, closer to 730 million. I am doubtful we see many positive changes to the balance sheets, guessing exports stay the same. Talk is for less "feed and residual." I am not so sure this happens. Therefore I continue to stick with my current belief that tomorrow’s report could actually be more bullish than many are thinking sub-730 million.
South American production will also be a main focal point. I am currently hearing a lot of mixed estimates so it should be interesting to see it play out. The trade seems to be thinking Brazilian soybean estimates are too high. I think this number is too high, as well. Personally I believe we may eventually see the number pull back closer to 82 million metric tons. Brazilian corn estimates are another story, with most in the trade thinking they push even higher. I am not so sure, as I continue to point it will all come down to the late rains in April and May. Hence, my hunch is the USDA leaves their estimate unchanged. Argentine corn production estimates are expected to move lower. I am not sure they will cut it by that much, but I do expect a number south of 26 million. Argentine soybean production estimates are also expected to be coming down. Personally, I am looking for a number closer to or even below 50 million metric tons.
Global grain stocks will also be reported. Most in the trade think wheat stocks will remain virtually unchanged, global corn stocks will push higher and global soybean stocks push a little lower.
To see my break down of tomorrows WASDE report click the link below and I will send it out to you. Thanks.