Despite minimal changes in the USDA’s March World Agricultural Supply and Demand Estimates on Wednesday, analysts saw a few positive signals.
India’s production of wheat dropped by 2.5 million tons, something that may turn the tide in a world awash with grain (and beans), said Kevin McNew, an analyst and founder of Grain Hedge in Bozeman, Mt.
Another bright sign is the upward value of Brazil’s real, making it tougher on that country’s exports. The U.S. soybean production strong record of consistency, which also is a plus for producers.
“I think this is as good as it gets. Farmers, who keep producing, need to figure out what do with lows for corn and beans,” McNew said.
Those growers are facing some significant market headwinds right now. “The rest of the world produces lots of corn and soybeans too,” Tom Grisafi, of Advance Trading in Bloomington, Ill., who said huge short positions held by hedge funds and the strong U.S. dollar are also adding to the downward pressure on prices.
Markets React Little to USDA Reports
Here are the key numbers from Wednesday's data release:
Corn: U.S. corn ending stocks were unchanged at 1.837 billion bu., which was lower than the trade’s projection of 1.854 billion bu. Exports also remained the same at 1.650 billion bu. Corn use for ethanol decreased by an estimated 9 million bu. Global corn ending stocks were down 1.8 million tons, reflecting smaller stocks in Brazil.
Soybeans: U.S. ending stocks were 460 million bu., which was slightly higher than the average trade forecast of 452 million bu. USDA also adjusted soybean production to 3.929 billion bu. after resurveying South Carolina producers. U.S. soybean trade projections are unchanged.
Wheat: U.S. heat stocks were unchanged at 966 million bu., which was lower than the average trade expectation of 975 million bu. Exports remained the same at 775 million bu. Hard red winter wheat exports were up by 10 million bu.; hard red spring wheat exports were down by the same amount. Global wheat supplies were lowered 3.3 million tons on lower production, but supplies remain at record high levels.
Analysts at Water Street Solutions described the report as a "non-event" for U.S. numbers and a "little friendly" for world numbers and said the focus for farmers now would be on spring weather.
In post-report trading, corn was mostly a penny lower, soybeans mostly 3 to 4 cents lower, and wheat 1 to 2 cents lower, according to Pro Farmer.