Grains are mixed to lower following the WASDE, which was bearish soybeans and neutral to slightly bearish for corn and wheat. USDA raised soybean ending stocks by 35 million bushels to 315 million, by lowering exports. Corn ending stocks were raised 10 mb to 2.172 billion bushels, wheat carryover was upped 10 mb to 658 million bushels.
USDA did acknowledge the impact of the historic drought on Brazil’s production but only lowered soybeans 1 million metric tons and revised last year’s crop up by 2 million. That and higher U.S. ending stocks were bearish. However, market analysts say those numbers were trumped by Conab’s estimate for Brazil beans, at 149.4 million metric tons, down nearly 6 million from last month.
Brian Splitt, Market Analyst, AgMarket.Net, says, “And USDA only dropped it by a million tons from the last month, 157 to 156. So, now you’ve got USDA at roughly 6.5 million metric tons higher on Brazilian soybean production than Conab and I think that’s probably what’s keeping soybeans afloat a little bit.”
While USDA slow played Brazil’s soybean estimates, Splitt expects USDA to eventually ratchet the crop down, maybe after more harvest results.
Splitt: 4:50 Will they come down more? I’d like to think so when they’re as much above Conab as they are. I wouldn’t be surprised in the long run to see total production below 150 million tons but maybe it takes USDA a couple months to get there.
On Brazil corn, USDA cut the crop by 3 million metric tons to 124 million. But its still well above Conab’s estimate.
Splitt says, “You know you look at Conab and they took the corn what do I have here 3.9 million metric tons, they dropped exports 3 million metric tons and that was down to 113.7 million metric tons.”
Splitt says USDA left Argentina production numbers unchanged at 55 million tons on corn and 50 million on beans, which is positive as the trade expected a slight increase. And he says Conab also increased Brazil wheat production by 2 million tons which was bearish.
