Fundamentally Speaking

Not a whole lot of excitement about upcoming monthly world supply-demand estimate (WASDE) data due out December 10.

This report is usually one of the least influential of the year coming a month before the final production report of the year and the December 1 quarterly grain stock figures, both of which will be released January 10 along with the 2020 winter wheat seedings report and the January 2020 WASDE.

Trade estimates for this report suggest very little change from what the USDA indicated last month.

The average analyst estimate is for a 4 (mb) decline in U.S. 2019/20 wheat ending stocks to 1.010 billion bushels (bb), a 9 mb gain in 2019/20 corn end stocks to 1.919 bb and a 1 mb gain in 2019/20 U.S. soybean ending stocks to 476 mb.

This graphic shows the percent change in U.S. corn, soybean and wheat ending stocks from the November to December WASDE reports from 1995 to 2018.

As one can see, changes in recent years have been very modest and sometimes there are no revisions whatsoever.

The 25-year average percent change for wheat stocks is up 0.5% which projects to a figure of 1.019 bb, an average corn revision of up 1.4% which projects to a figure of 1.937 bb and an average soybean change of down 2.0%, resulting in 2019/20 soybean ending stocks at 466 mb.

Given a very sluggish export pace seen so far this marketing year for corn, a 25 mb drop in the projected exports of 1.850 bb would not be too surprising.

(KLM)

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