The key player in today's WASDE report is South America, specifically Brazil. Domestic corn exports continue to decrease due to stiff competition from Brazil. As weather improves, Brazil is estimated to produce a record soybean crop of 83.5 million tons, surpassing the U.S. as the world's largest producer of soybeans.
U.S. corn ending stocks were increased by 30 million bushels to 632 million bushels due to decreases in exports, partially offset by a 20 million bushels increase in demand from industrial use. The USDA projected a 50 million bushel decrease in corn exports due to a slow pace of shipments and expected competition from Brazil. The season average price range was lowered 20 cents at the midpoint to $6.75 to $7.65 per bushel.
Global coarse grain supplies in 2012/13 were estimated to increase 2.1 million tons due to increases in production. Global corn production for 2012/13 was increased by 2.1 million tons with increases in Brazil, Mexico, India, and Ukraine.
U.S. 2012/13 ending stocks were decreased by 10 million bushels to 125 million bushels because of an increase in crush production. The 2012/13 average soybean price was increased five cents on both ends of the range to $13.55 to $15.05 per bushel.
Global soybean production was increased to 269.5 million tons as Brazil's production prospects more than offset Argentina's depleting weather and production conditions. Brazil's production estimate has been increased by 1.0 million tons to a record 83.5 million tons.
We will continue to follow South American weather and production estimates as we see these as key indicators of price movement.
2012/13 U.S. wheat ending stocks were decreased by 25 million bushels to 691 million. U.S. wheat feed and residual use for 2012/13 was increased by 25 million bushels due to the competitive price of wheat over corn. The season average wheat price for 2012/13 was narrowed five cents on both ends of the range to $7.70 to $8.10 per bushel.
The February WASDE report has historically had minimal impact on the markets and this report confirms it. The majority of this data was already taken into consideration and was in line with analysts' expectations.