All eyes were on yesterday’s World Agricultural Supply and Demand Estimates (WASDE) report from USDA, which turned out to move the needle significantly – just not always in the direction traders were hoping, disappointing the bulls.
Soybean prices were the clear winner – fighting through a choppy session to close with double-digit gains.
But corn prices slumped nearly 1.5% lower on a round of technical selling after U.S. ending stocks came in much higher than expected.
Wheat prices also faced a moderate drop after some technical selling.
Global corn ending stocks, indeed, are now seen at 286.53Mt, up 2.7Mt from the January figure.
USDA’s forecast for China’s corn imports now stands at 24Mt, up 6.5Mt from January, its corn ending stocks are now seen at 196.18, up 4.5Mt, and its domestic feed corn use is now pegged at 206Mt, up 6Mt.
The big miss is the US corn exports and carry-out.
It seems USDA has decided that 1.5Mt is the minimum figure and that’s that for now.
The US is not rationing export demand and has a huge forward book reported, so something still has to give.
The expected increase in China corn imports was there, but it was washed with some reductions in EU imports and minor imports to balance the ledger.
Bearish for corn was also the 2.5Mt cut to Europe’s forecast imports, now seen at 15.5Mt, and cuts of 500,000t and 400,000t respectively for South Korea and Japan.
On soybeans, world ending stocks have been cut to 83.36Mt from 84.31Mt, and the estimate for China’s soybean imports was unchanged at 100Mt.
USDA’s forecast for soybean imports to Europe including the United Kingdom has been cut by 250,000t to 15.15Mt.On wheat, USDA’s global production estimate has risen 200,000 tonnes from the January forecast to 772.64 million tonnes (Mt).
On wheat, USDA’s global production estimate has risen 200,000 tonnes from the January forecast to 772.64 million tonnes (Mt).
A 300,000t cut for Argentina to 17.2Mt, and an increase for Kazakhstan to 14.26Mt from 12.5Mt seen last month are the major changes.
In wheat ending stocks, a 4Mt cut for China to 154.93Mt, and a 3.82Mt cut for India to 27.5Mt were the major drivers of the reduction in world ending stocks, now seen at 304.22Mt, down from 313.19Mt seen last month.
The forecast for China’s wheat imports rose 1Mt to 10Mt.
Wheat imports from South-East Asia are now seen at 25.95Mt, down from 26.25Mt in January, and exports to selected Middle Eastern countries has dropped 200,000t to 18Mt.
No new flashes have appeared yesterday for US export sales, despite expectations that significant business has been done to China.
However yesterday, Philippine importers have purchased 224.000 t of animal feed wheat from optional origins.
The purchase, comprised of four separate consignments, will be shipped between April and June.
About price, results came in just at under $300/t, which should back off to Australian shipment.
About that, Aussie markets continued through quiet yesterday, although some larger chunks of origination business did hit later in the day on the east coast, and discussion has been ongoing about more export sales running into the Australian winter.
About Europe grains news, France’s Ag Ministry has released its estimates for new-crop area, and they include an 18-per-cent drop for corn and a 40pc drop for spring barley, but an increase of 15pc for winter wheat with a acreage estimate which is now at 4,86 Mha.
However, that only comes in 0.7% above the prior five-year average.
On weather markets hand, winter kill and frost damage concerns exist for parts of Ukraine.
The US cold snap is still on the radar, as soil temperatures are at risk of dropping, although some more light snow on the forecasts would help with insulation.
South American weather maps are mostly unchanged, and still hold very dry for Argentine corn and soybean areas across the two-week runs, which will be good for the delayed Brazilian harvest.
We will see tonight how close the sessions.
