PF Special Reaction: Corn, Soybean and Wheat Carryover Tops Expectations

Posted on 03/09/2017 10:24 AM

Market reaction

Ahead of the reports, corn futures were trading mostly 1 cent lower with soybeans 1 to 2 cents lower and wheat steady to 2 cents lower. Cotton futures were mostly 30 to 40 points lower.

Following the Supply & Demand update, corn is trading steady to fractionally higher, soybeans are 1 to 2 cents higher, wheat is narrowly mixed and cotton is mostly 55 to 75 points lower.

Pro Farmer's Chip Flory reacts to USDA's report:

 

2015-16 U.S. carryover

Corn: 1.837 billion bu.; up from January proj. of 1.802 billion bu.
-- compares to 1.731 billion bu. in 2014-15
Beans: 450 million bu.; up from January proj. of 440 million bu.
-- compares to 191 million bu. in 2014-15
Wheat: 966 million bu.; up from January proj. of 941 million bu.
-- compares to 753 million bu. in 2014-15
Cotton: 3.6 million bales; up from January proj. of 3.1 million bales
-- compares to 3.7 million bales in 2014-15


USDA's estimate of 2015-16 corn carryover came in 28 million bu. above the average pre-report trade estimate and is up 35 million bu. from last month. USDA increased estimated imports by 10 million bu. (to 50 million bu.) to increase total supplies by 10 million bushels. On the demand side, USDA increased estimated Food, Seed & Industrial use by 25 million bu. (to 6.595 billion bu.), with the entire increase going to corn-for-ethanol production (which now stands at 5.225 billion bu.). More than offsetting the increase in FSI use, USDA cut estimated exports by 50 million bu., dropping the expected tally to 1.65 billion bushels. USDA now puts the national average on-farm cash corn price at $3.35 (up a nickel from last month) to $3.85 (down a nickel from January).

USDA's estimate of soybean carryover is 5 million bu. above the average pre-report trade estimate and is up 10 million bu. from January. USDA made no change on the supply side of the balance sheet. On the demand side, USDA cut estimated crush by 10 million bushels (to 1.880 billion bu.). USDA left the national average on-farm cash soybean price projection unchanged from last month at $8.05 to $9.55.

USDA's wheat carryover estimate is 19 million bu. above the average pre-report trade estimate and is up 25 million bushels from last month. No changes were made on the supply-side of the balance sheet. On the demand side, USDA cut estimated exports 25 million bu., dropping the tally to an estimated 775 million bushels. The national average on-farm cash wheat price projection was unchanged from January at $4.90 to $5.10.

USDA's estimate of cotton carryover is up 500,000 bales from January, the result of a 500,000-bale cut to estimate exports. Exports in the current marketing year are now estimated at just 9.5 million bales. USDA now puts the national average on-farm cash cotton price at 58 cents (up a penny from last month) to 61 cents (unchanged from last month).

 

2015-16 global carryover

Corn: 208.81 MMT; down from January proj. of 208.94 MMT
-- compares to 206.18 MMT in 2014-15
Beans: 80.42 MMT; up from January proj. of 79.28 MMT
-- compares to 77.08 MMT in 2014-15
Wheat: 238.87 MMT; up from January proj. of 232.04 MMT
-- compares to 214.51 MMT in 2014-15
Cotton: 104.08 mil. bales; up from January proj. of 102.86 mil. bales
-- compares to 112.17 million bales in 2014-15

 

2015-16 global production highlights

Argentina beans: 58.5 MMT; compares to 57.0 MMT in January
-- compares to 61.4 MMT in 2014-15
Brazil beans: 100.0 MMT; compares to 100.0 MMT in January
-- compares to 96.2 MMT in 2014-15
Argentina wheat: 11.0 MMT; compares to 10.5 MMT in January
-- compares to 12.5 MMT in 2014-15
Australia wheat: 26.0 MMT; compares to 26.0 MMT in January
-- compares to 23.67 MMT in 2014-15
China wheat: 130.19 MMT; compares to 130.19 MMT in January
-- compares to 126.21 MMT in 2014-15
Canada wheat: 27.6 MMT; compares to 27.6 MMT in January
-- compares to 29.42 MMT in 2014-15
EU wheat: 157.98 MMT; compares to 157.98 MMT in January
-- compares to 156.53 MMT in 2014-15
Russia wheat: 61.0 MMT; compares to 61.0 MMT in January
-- compares to 59.08 MMT in 2014-15
FSU-12 wheat: 117.53 MMT; compares to 117.53 MMT in January
-- compares to 112.73 MMT in 2014-15
China corn: 224.58 MMT; compares to 224.58 MMT in January
-- compares to 215.65 MMT in 2014-15
Argentina corn: 27.0 MMT; compares to 25.6 MMT in January
-- compares to 27.0 MMT in 2014-15
South Africa corn: 7.0 MMT; compares to 8.0 MMT in January
-- compares to 10.8 MMT in 2014-15
Brazil corn: 84.0 MMT; compares to 81.5 MMT in January
-- compares to 85.0 MMT in 2014-15
China cotton: 23.8 mil. bales; compares to 23.8 mil. bales in January
-- compares to 30.0 million bales in 2014-15

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