While USDA rarely makes any revisions to yield or production in the June WASDE, this was a fairly benign report with only slight adjustments to the balance sheets.
Corn Carryout Lowered 50 Million Bushels
The agency made only slight revisions to U.S. corn ending stocks, lowering old crop 50 million bushels to 1.365 billion bushels with the same increase in exports. That resulted in lower carryout for new crop at 1.75 billion. (Graphic)
“We were looking for the 50 million bushel reduction in old crop stocks again due to the export pace and that is the exact drop we got to 1.365 billion bushels,” says Brian Splitt, AgMarket.Net. “That decreases the new crop carryout estimate by the same 50 million bushels due to, again, reduction in carry in.”
However, Splitt says old crop corn doesn’t feel like its trading that tight of a carryout nor do the July/December spreads.
“That type of carryout in previous years with stocks to use at similar levels has seen July trading substantially higher than December at this time of year,” he adds. “One has to wonder if USDA is going to find bushels in the June stocks report because I don’t think the flat price and spreads are trading like the carryout is what they’re telling us.
South American Production Unchanged
Surprisingly, USDA left South American corn and soybean production unchanged. Splitt says they were looking for at least an increase in Brazil corn production above USDA’s 130 million metric tons due to the larger Safrinha corn crop.
“I’m surprised USDA didn’t increase the size of the Safrihna corn crop,” Splitt says. “That’s been a very common discussion point recently from a lot of the private analysts with estimates for that crop at 132 or 134 MMT. It seems to have gotten bigger over the last couple months.”
New Crop Wheat Ending Stocks Slightly Lower
USDA left winter wheat production essentially unchanged at 1.921 billion bushels, which Splitt thinks could go up in future reports. However, the agency did lower new crop wheat ending stocks by 25 million bushels to 898 million. According to Splitt, that was due to a 25 million bushel increase in exports, mostly hard red winter wheat.
“I’m glad USDA acknowledged that we do have a very strong export pace for wheat for the new crop,” he says. “You know, we’ve got a very strong start to new crop sales. I think it’s the best in about 12 years or so.”
Soybean Ending Stocks Static
USDA also kicked the can down the road on U.S. ending stocks for soybeans with old crop at 350 million bushels and new crop at 295 million bushels.
World carryout was lowered 2.6 million tons on corn to 275.2 MMT and 3 million tons on wheat to 262.8 MMT, Soybean carryout increased by 1 million to 125.3 MMT.
The bigger reports come at the end of the month with USDA’s Quarterly Stocks and Acreage.
