Grain and oilseed prices on the CME made gains Friday, despite USDA releasing what some grain analysts described as a slightly bearish World Agricultural Supply and Estimates (WASDE) report.
USDA left U.S. corn stocks unchanged, lowered soybean stocks, but increased U.S. wheat stocks from the previous month. That’s as USDA lowered its feed use estimate for both corn and wheat, but did increase ethanol use. USDA also boosted its U.S. soybean export forecast.
And in South America, USDA lowered its Brazil soybean crop estimate by 2 million metric tons to 125 million on Friday. Highlights from the South American revisions include:
- Brazil Soybean Crop: 125 MMT, Down 2 MMT
- Brazil Corn Crop: 116 MMT, Up 1 MMT
- Argentina Soybean Crop: 53 MMT, Unchanged
- Argentina Corn Crop: 43.4 MMT, Unchanged
USDA made slight revisions in Russia and Ukraine, but the changes offset one another. USDA reduced the country’s wheat exports by 1 million metric tons, but increased Russia’s exports by 1 million metric tons.
The report itself wasn’t a big market mover, according to John Payne, publisher of ‘This Week in Grain.’
“I thought that the wheat numbers specifically weren’t anything really to write home about. We didn’t get a whole lot of indication as far as what direction they’re thinking in regards to global supplies,” says Payne. “Yes, there’s some problems, obviously, who’s going to export what, but the total numbers really are still there. And I think that was reflected today.”
Overall, Payne says the wheat stocks number is still large, yet Hard Red Wheat (HRW) and Spring Wheat prices still inched above $11 Friday.
“At this point in time, I think the market is rallying on more than just USDA here,” he adds. “I think the USDA is probably taking a little bit of a secondary stance to a market driver. And there might be something here in Russia and Ukraine as we head into the weekend, and folks just don’t want to be short.”
Mike North of ever.ag says there wasn’t anything major on the U.S. stocks side, as the revisions were in line with expectations.
“Further, they didn’t lower production at all,” says North. “As we talk about where things are at, I think it’s important to realize that we’re just kind of moving things in alignment with where the markets already at.”
North agrees with Payne in the fact there were other factors at play in the market, and USDA’s WASDE report wasn’t what fueled prices Friday. Instead, he thinks outside traders hedged their bets ahead of the weekend.
“I think, to John’s point, there’s either an idea out there that there’s something more coming with this conflict, or I think you could also say that now that we’ve got this report behind us, I think a lot of people might have been waiting for any sort of surprises or anything that might have been an unknown. And now that there isn’t any, now I can proceed on as planned and add to this already long position that I have, and keep trying to get in front of this market,” says North.
