The April 10 monthly USDA supply/demand update contained mixed news for futures markets as the agency’s latest corn and soybean ending stocks projections were larger than most expected, while its wheat stocks estimate was smaller.
USDA raised projected 2006-07 U.S. corn ending stocks to 877 million bushels versus a previous estimate of 752 million bushels and trade estimates averaging 826 million bushels in a range from 732-902 million bushels.
A larger-than-expected cut in projected feed usage of corn was behind the higher ending stocks figure. USDA cut expected feed/residual corn by 125 million bushels to 5.850 billion bushels. Projected corn exports and industrial/fuel alcohol (ethanol) use of corn were left unchanged.
On the world corn supply/demand balance sheet, USDA raised the projected world corn carryout by 4.6% to 91.82 million metric tons due to the slower U.S. corn usage and larger South American corn crops.
USDA raised its estimate of Argentina’s corn crop by 500,000 metric tons to 22 million tons and raised Brazil’s projected crop by 1.5 million tons to 49.5 million tons.
USDA pegged 2006-07 U.S. soybean ending stocks at a record 615 million bushels, up from a previous estimate of 595 million bushels and trade estimates averaging 586 million bushels in a range from 562-615 million bushels.
The trade had expected a slightly lower soybean carryout estimate based on lower-than-expected March 1 soybean stocks. The increase in ending stocks was due primarily to an increase in expected export competition from South America due to larger crops in Brazil and Argentina.
USDA cut projected U.S. soybean exports by 20 million bushels to 1.80 billion bushels and cut the projected U.S. soybean crush by 15 million bushels to 1.765 billion bushels, partly because of a drop in expected soymeal exports.
Projected soybean seed usage was also trimmed slightly by USDA, while residual usage was raised 20 million bushels to 99 million.
On the world supply/demand balance sheet for soybeans, USDA raised projected Brazilian production by 1.8 million metric tons to 58.8 million tons and raised Argentina’s projected crop by 1 million tons to 45.5 million tons. Projected world soybean ending stocks were raised by 6.1% to 61.02 million metric tons.
Editor’s note: Richard Brock, The Corn And Soybean Digest's Marketing Editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.
To see more market perspectives, visit Brock's Web site at www.brockreport.com.