A week after USDA released its annual March acreage survey results, the agency will give an updated look at supply and demand in the April World Agricultural Supply and Demand Estimates (WASDE). From questions about supply in Ukraine, to changing estimates on Brazil’s Safrinha corn crop, USDA will weigh possible adjustments in the report.
Prior to USDA’s release of the April WASDE numbers on Friday, April 8, the average trade guess gathered by Reuters shows an expectation for USDA to reduce the Argentina corn crop but raise corn crop projections for Brazil.
“The Brazilian corn crop, that second corn crop in Brazil, is actually going to end up being really good the way that it looks,” says Joe Vaclavik of Standard Grain. “The soybean crop–which they’re almost done harvesting beans in Brazil–is going to be quite a bit lighter than expected. I think USDA has to come down with that estimate a little bit. So, keep an eye on those South American numbers as well.”
The average trade guess for soybeans shows the expectation for Brazil to lower its production estimates for both Argentina and Brazil.
Vaclavik says Friday’s numbers are a look at old crop. So, even with the latest acreage numbers n the U.S., new crop won’t be incorporated until May.
“They’re not going to give us new crop balance sheets. We don’t see those until the May report,” Vaclavik says. “The stuff to keep an eye on would be U.S. demand. I mean ethanol feed, soybean crush, soybean exports, all that sort of stuff. You can look for the Ukraine-Russia situation to be adjusted a little bit. USDA adjusted some of those numbers last month. But I’ll be curious to see if they make additional revisions this month. It’s such an impossible task that USDA has to try to estimate or project exactly how that situation is going to play out.”
Vaclavik points out the seasonality of the markets are a trend to always watch, but he says with the crisis in Ukraine, plus the changing crop scenario in Brazil, this year is anything but normal.
