Look for Brazil’s soybean crop to get larger and feed use of corn to hold. Those will likely be the highlights of USDA’s World Agricultural Supply and Demand Estimates, released Monday, Feb. 10.
"Usually feed numbers are changed after the quarterly grain stocks reports," says Rich Nelson, director of research for Allendale, a brokerage services firm in McHenry, Ill. "USDA adjusted feed use in January by increasing it 100 million bushels. Feed use will be on hold until the April report."
In the January WASDE report, USDA put first-quarter 2013-14 feed use 17% above the previous-year’s first quarter and full-year feed use at 5.3 billion bushels, up 22% from 2012-13. Allendale calls USDA’s recent feed use estimate "unrealistic" but doesn’t expect changes in Monday’s report.
Combined beef, dairy and pig numbers are lower than a year ago, but feed use still will be higher this year than last for a couple of reasons.
"DDGs are being exported leaving a smaller domestic supply, and there’s a shift from feeding wheat into feeding corn," says Nelson. "But does a smaller supply of DDGs and less wheat feeding really mean a 22% increase in feed use for 2014?"
Allendale expects USDA to increase corn exports by 50 million bushels and to lower corn used in ethanol by 50 million bushels.
Average trade estimates call for a lower 2013-14 corn carryout, but ending stocks are still large. The average trade estimate for corn ending stocks came in at 1.619 billion bushels and ranged from 1.574 billion to 1.748 billion, compared with USDA’s latest estimate of 1.631 billion bushels.
Allendale expects USDA to raise soybean exports and lower ending stocks for soybeans. The brokerage firm pegs ending stocks of soybeans at 135 million bushels, compared with USDA’s previous forecast of 150 million bushels.
The average trade estimate for 2013-14 soybean ending stocks is 143 million bushels, with a range of estimates from 125 million to 164 million.
"This is a very minor report in the big picture," says Nelson. The South American crops will be a major focus.