MISSOURI (DTN) — USDA’s World Agricultural Supply and Demand Estimates (WASDE) and Production reports in June are not known for their dramatic surprises, and Friday’s latest round of estimates did not damage that age-old reputation. Other than a few updates on South American crops, few changes were made.
We will have to wait for USDA’s Acreage report on June 30 and subsequent WASDE reports to learn more about this year’s crops.
Starting in corn, estimates of U.S. ending corn stocks remained at 2.295 billion bushels for the current season and at 2.110 billion bushels for 2017-18. USDA continues to expect corn exports to be up 17% in 2016-17 even though total corn shipments are already up 44% from a year ago with just 13 weeks remaining.
The reason USDA’s export estimate is staying at 2.225 billion bushels is Brazil. And, on that topic, USDA increased its estimate of Brazil’s 2016-17 corn production from 96.0 million metric tons to 97.0 mmt while keeping Argentina’s 40.0 mmt estimate unchanged. Both are significant increases from the previous year, and those supplies will soon be competing with U.S. corn.
In soybeans, USDA bumped up its estimates of U.S. ending soybean stocks by 15 million bushels, to 450 million bushels in 2016-17 and to 495 million bushels in 2017-18. Both adjustments were the result of a single reduction of 15 million bushels to the soybean crush estimate in the current season. The slower pace of crush in 2017 is no secret, but USDA’s adjustments could be considered mildly bearish.
The bigger concern for soybean prices is the size of this year’s U.S. planting, and the next clue of that will be released on June 30. USDA’s March estimate of 89.5 million acres proposed a new record high and has already had a bearish effect on prices. After this year’s wet spring put crops under water in many areas, there is a chance that soybean acres have gone higher than expected.