Corn Exports Highlight USDA Supply, Demand Estimates

(AgriNews) –  An unexpected jump in corn exports lightened up what was anticipated to be a typically blasé February supply and demand report from the U.S. Department of Agriculture.

Matthew Gallic, CHS Hedging market analyst, broke it all down in a Minneapolis Grain Exchange-hosted teleconference Feb. 8.

The trade anticipated little or no change in the corn balance sheet leading into the report. What happened?

Corn market was exports were up a whopping 125 million bushels. That puts us at 2.05 billion bushels of exports and directly correlates to ending stocks, down to 2.352 billion bushels.

“The report should be supportive for corn.”

That was below the average estimate going into the report of 2.468 billion bushels. The world carryout was also decreased to 203.9 million metric tons, and that was also below the average estimate.

Analysts were anticipating an increase in soybean ending stocks as the South American crop entered the export market. Did this report agree with those projects?

The only change to the soybean balance sheet was exports dropped by 60 million bushels to 2.1 billion bushels, and that increased ending stocks to 530 million bushels.

A lot of people thought once we cross that 500 million bushel mark that we would see that as a negative thing. From a complex side here in the U.S., soybean oil and soybean meal numbers were all unchanged.

From a world perspective, we did see the Argentinean soybean crop drop 2 million metric tons to 54 million metric tons like a lot of analysts were expecting. The Brazilian soybean crop did increase by 2 million metric tons to offset that, and it is now 112 million metric tons.

All wheat stocks have increased in previous supply and demand estimates. Did the trend continue?

As far as negative numbers, we had hard red winter wheat exports down 10 million bushels, increasing ending stocks to 494 million bushels and the stocks-to-use ratio at 58 percent.

For the all wheat numbers, exports were down 25 million bushels to 950 million bushels, total use was down 20 million bushels to 2.067 billion bushels.

So, all wheat ending stocks were above that 1 billion bushel mark to 1.009 billon bushels. That’s generally not a friendly thing that the wheat likes to see.

The stocks-to-use ratio is up to 48.8 percent. We were looking for just a slight increase there, and we’ll call that just a slight bit bearish.