Ahead of USDA's reports, corn futures were trading 1 to 2 cents lower, soybeans were 2 to 3 cents lower, winter wheat futures were 2 to 4 cents lower, spring wheat futures were 1-plus cents lower and cotton futures were 25 to 30 points higher.
So far, the reaction to the data has been pretty restrained. Corn and soybean futures are down a penny or two. Winter wheat futures are 3 to 8 cents lower, with the SRW market leading losses. Spring wheat futures are down 2 to 3 cents. And cotton futures are narrowly mixed.
Corn: 1.892 billion bu. for 2019-20; unchanged from 1.892 billion bu. in January
Beans: 425 million bu. for 2019-20; down from 475 million bu. in January
Wheat: 940 million bu. for 2019-20; down from 965 million bu. in January
Cotton: 5.4 million bales for 2019-20; unchanged from 5.4 million bales in January
USDA’s corn ending stocks forecast is unchanged from last month. Traders anticipated a 28-million-bu. reduction in corn ending stocks. USDA made no changes to projected supplies. On the demand side of the ledger, USDA raised its food, seed and industrial use forecast by 50 million bu., with all of that coming via bigger corn-for-ethanol usage. That was fully offset by a 50-million-bu. cut to exports, which are now projected at 1.725 billion bushels. USDA left its national average on-farm cash corn price at $3.85.
USDA lowered its soybean ending stocks forecast by 50 million bu. from last month. Traders were expecting a 32-million-bu. reduction in old-crop soybean carryover. USDA made no changes to the supply side of the balance sheet. On the demand side, it increased exports by 50 million bu. and left the other usage categories unchanged from last month. USDA now projects the national average on-farm cash soybean price at $8.75, down a quarter from last month.
USDA lowered its old-crop wheat ending stocks forecast by 25 million bu. from last month; that’s 14 million bu. more of a reduction than traders anticipated. USDA made no changes on the supply side of the balance sheet. The only change on the usage side of the balance sheet is a 25-million-bu. increase to exports, which are now projected at 1 billion bushels. USDA kept its national average on-farm cash wheat price at $4.55.
USDA made no changes to the supply or demand sides of the cotton balance sheet versus last month. Traders expected USDA to trim ending stocks by 90,000 bales. USDA did, however, lower the national average on-farm cash cotton price projection by a penny to 62 cents per pound.
Note: This is USDA’s first forecasts since the Phase 1 trade deal with China was signed. The only direct China-specific commentary on U.S. exports that USDA included in this report was in soybeans. The department raised soybean exports for 2019-20 by 50 million bu. from last month, “partly reflecting increased imports for China.” USDA increased Chinese soybean imports for 2019-20 by 3 MMT to 88 MMT. China’s ag ministry left its 2019-20 Chinese soybean import forecast at 87.7 MMT earlier today.
In its cotton commentary, USDA also noted: “A 1-million-bale decline in China’s expected consumption is the largest single change this month: consumption is lower despite the positive impact of the U.S.-China trade agreement, due in part to the negative economic effects of the novel coronavirus outbreak.”
USDA raised its pork export forecast for 2020 by 275 million pounds, but it made no direct reference to increased Chinese demand, noting only “expected robust global demand.”
2019-20 global carryover (without China)
Corn: 97.77 MMT; down from 98.74 MMT in January
— compares with 110.15 MMT in 2018-19
Beans: 77.13 MMT; up from 76.94 MMT in January
— compares with 91.77 MMT in 2018-19
Wheat: 139.78 MMT; down from 140.62 MMT in January
— compares with 138.51 MMT in 2018-19
Cotton: 48.38 million bales for 2019-20; up from 46.85 million bales in January
— compares with 44.32 million bales in 2018-19
2019-20 global production highlights
Argentina beans: 53.0 MMT; compares with 53.0 MMT in January
— compares with 55.3 MMT in 2018-19
Brazil beans: 125.0 MMT; compares with 123.0 MMT in January
— compares with 117.0 MMT in 2018-19
Argentina wheat: 19.0 MMT; compares with 19.0 MMT in January
— compares with 19.5 MMT in 2018-19
Australia wheat: 15.6 MMT; compares with 15.6 MMT in January
— compares with 17.3 MMT in 2018-19
China wheat: 133.59 MMT; compares with 133.59 MMT in January
— compares with 131.43 MMT in 2018-19
Canada wheat: 32.35 MMT; compares with 32.35 MMT in January
— compares with 32.2 MMT in 2018-19
EU wheat: 154.0 MMT; compares with 154.0 MMT in January
— compares with 136.86 MMT in 2018-19
Russia wheat: 73.5 MMT; compares with 73.5 MMT in January
— compares with 71.69 MMT in 2018-19
Ukraine wheat: 29.0 MMT; compares with 29.0 MMT in January
— compares with 25.06 MMT in 2018-19
China corn: 260.77 MMT; compares with 260.77 MMT in January
— compares with 257.33 MMT in 2018-19
Argentina corn: 50.0 MMT; compares with 50.0 MMT in January
— compares with 51.0 MMT in 2018-19
Brazil corn: 101.0 MMT; compares with 101.0 MMT in January
— compares with 101.0 MMT in 2018-19
Ukraine corn: 35.8 MMT; compares with 35.5 MMT in January
— compares with 35.81 MMT in 2018-19
South Africa corn: 14.5 MMT; compares with 14.0 MMT in January
— compares with 11.8 MMT in 2018-19
China cotton: 27.25 million bales; compares with 27.25 million bales in January
— compares with 27.75 million bales in 2018-19