The May WASDE will provide the first new crop estimates of the growing season and this could be a volatile report because USDA will have to make the transition from tight old crop stocks to much larger supplies of at least corn and soybeans.
Old crop corn ending stocks are expected to increase by about 24 million bushels, with lower exports. For new crop USDA will use the 91.5-million-acre planting intensions and trendline yield which puts production estimates at 15.12 billion bushels and ending stocks at nearly 2.1 billion. Market experts say that means a huge transition between the two crops. Garrett Toay, AgTrade Talk says, “The trade is looking for 2-billion-bushel carryout. If you look at where the trade is expecting old crop carry out to new cup curio that spread them on a 750 million bushel spread and that is the fourth largest on record. So we’re going to have a pretty big build and new crop supplies is at this point, assuming all goes well.”
For soybeans the transition between old and new crop is much tighter. USDA will use the 87.5-million-acre planting intentions, with a trendline yield so production is estimated at 4.5 billion bushels. That results in a modest increase in ending stocks to 293 million.
Randy Martinson, Martinson Ag says, “For soybeans you know, it’s not as bad. You know, they’re we’re looking at the same amount of acres as last year, but bigger yield potential, little tightening, maybe of the demand side, but stocks are still building close to, you know, 90 million 70 million to 90 million. So still, it’s a still an increase, which is a little bit negative.” Martinson says for old crop soybean carry over the trade is only expecting a slight adjustment to 212 million bushels.
In wheat the focus will be on hard red winter production and how many acres are abandoned in states like Kansas and Oklahoma. However, the production estimate is currently above last year by about 57 million bushels. New crop ending stocks estimates are at 602 million bushels almost even with last year but a ten-year low.
