PF Reaction: Corn Carryover Now Projected to Remain Above 2 Billion Bushels

Posted on 04/09/2019 11:23 AM

Market reaction

 

Ahead of USDA's report, corn and soybean futures were trading 3 to 4 cents lower, winter wheat futures were 3 to 5 cents lower, spring wheat futures were narrowly mixed and cotton futures were 40 to 60 points lower.

 

Following the report, corn futures are trading fractionally higher, soybeans are steady to a penny higher, winter wheat futures are 2 to 5 cents lower, spring wheat futures are steady to a penny lower and cotton futures are down 20 to 95 points.

 

 

 

U.S. carryover

 

Corn: 2.035 billion bu. for 2018-19; up from 1.835 billion bu. in March
Beans: 895 million bu. for 2018-19; down from 900 million bu. in March
Wheat: 1.087 billion bu. for 2018-19; up from 1.055 billion bu. in March
Cotton: 4.4 million bales for 2018-19; up from 4.3 million bales in March

 

On old-crop corn, USDA increased estimated old-crop corn carryover by 200 million bu. from last month. That’s also 44 million bu. above the average pre-report trade estimate. USDA made no changes on the supply side of the balance sheet for old-crop corn. On the demand side, USDA cut 75 million bu. from estimated feed & residual use (to 5.3 billion bu.), cut 50 million bu. from food, seed & industrial use (to 6.965 billion bu., with all of the cut to corn-for-ethanol use that is now estimated at 5.5 billion bu.). USDA finished it off with a 75-million-bu. cut to estimated corn exports, dropping the tally to 2.3 billion bushels. USDA now puts the national average on-farm cash corn price at $3.40 to $3.70, up a nickel on the bottom and down a nickel on the top end of the range from last month.

 

Bean carryover was cut 5 million bu. from last month, basically lining up with trade expectations. USDA cut total supplies by 3 million bu., the result of smaller imports (now at 17 million bu.). USDA also increased estimated seed use by 2 million bu. to 98 million bushels. USDA puts the national average on-farm cash bean price at $8.35 to $8.85, up a quarter on the bottom and down a quarter on the top end of the range from last month.

 

USDA made no changes on the supply-side of the balance sheet for wheat. However, carryover was up 32 million bu. from last month and 15 million bu. above the average pre-report trade estimate. USDA cut 1 million bu. from estimated seed use (62 million bu.), 10 million bu. from feed & residual use (to 70 million bu.) and cut 20 million bu. from estimated exports (dropping the tally to 945 million bu.). USDA puts the national average on-farm cash wheat price at $5.15 to $5.25, up a nickel on both ends of the range from last month.

 

Cotton carryover stocks are up 100,000 bales from last month. USDA made no change on the supply side of the balance sheet and cut 100,000 bales from estimated domestic use to drop the tally to 3.1 million bales. USDA left the national average on-farm cash cotton price at 69 cents to 71 cents.

 

 

 

Global carryover

 

Corn: 314.01 MMT for 2018-19; up from 308.53 MMT in March
Beans: 107.36 MMT for 2018-19; up from 107.17 MMT in March
Wheat: 275.61 MMT for 2018-19; up from 270.53 MMT in March
Cotton: 76.44 million bales in 2018-19; up 76.09 million bales in March

 

 

 

Global production highlights

 

Argentina beans: 55.0 MMT for 2018-19; compares to 55.0 MMT in March
Brazil beans: 117.0 MMT in 2018-19; compares to 116.5 MMT in March
Argentina wheat: 19.5 MMT in 2018-19; compares to 19.5 MMT in March
Australia wheat: 17.3 MMT in 2018-19; compares to 17.3 MMT in March
China wheat: 131.43 MMT in 2018-19; compares to 131.43 MMT in March
Canada wheat: 31.8 MMT in 2018-19; compares to 31.8 MMT in March
EU wheat: 137.6 MMT for 2018-19; compares to 137.6 MMT in March
Russia wheat: 71.69 MMT for 2018-19; compares to 71.69 MMT in March
Ukraine wheat: 25.06 MMT for 2018-19; compares to 25.0 MMT in March
China corn: 257.33 MMT for 2018-19; compares to 257.33 MMT in March
Argentina corn: 47.00 MMT for 2018-19; compares to 46.0 MMT in March
South Africa corn: 11.0 MMT for 2018-19; compares to 11.0 MMT in March
Brazil corn: 96.0 MMT for 2018-19; compares to 94.5 MMT in March
China cotton: 27.75 million bales for 2018-19; compares to 27.5 million bales in March

 

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