Wheat Faces Biggest Weekly Fall Since Mid-March on USDA Forecast
May 11, 2018
USDA Report Signals Change in Corn, Status Quo for Wheat/Beans
For corn, USDA came in a bit higher than the trade on NC carryout with USDA pegging it at 1,682 MB versus a trade pre-report average of 1,628 MB. Nonetheless this is a big drop from old-crop carryout at 2,182. Global stocks were a big surprise at a slim 159 MMT. If realized that would be the lowest global cushion since 2012.
Beans had a surprisingly low US new-crop carryout at 415 MB, well below trade estimates of 535 thanks to a meteoric rise in US exports of 225 MB on the year that USDA has penciled in. The soy trade is obviously skeptical of that result given the soy market failed to hold early gains after the announcement. Winter wheat production was higher than expected which led to US stocks only slightly off of this year’s 30-year high carryout relative to use. At 955 MB of new-crop stocks projected for 2018, that means the US still is plagued by nearly a half a year’s worth of use on hand at the end of the year.
Brazil Rain Outlook Diminishing
The latest GFS/EC weather models point to some rain potential next Tuesday and then a better total a week out in key growing area of Parana. The 2nd largest state for Safrinha corn has not seen any meaningful rain since April 2nd. USDA lowered their Brazil corn crop forecast to 87 MMT from previous the estimate of 92 MMT. The biggest state of Mato Grosso has seen limited rain since mid-April but has not been as parched as Parana.
South Korea’s MFG passed on 70,000 MT of corn after receiving offers it said were too high. Taiwan’s MFIG bought 65,000 MT of corn with optional origin from Brazil or the US.
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