USDA Reports Preview
An April Formality
USDA's World Agricultural Supply and Demand Estimates (WASDE) report on April 9 remains focused on old-crop estimates and is not likely to tell us much we don't already know. But we'll keep an eye on the numbers all the same.
USDA will release its WASDE and Crop Production reports on Tuesday, April 9, at 11 a.m. CDT.
CORN
After USDA just told us on March 29 that U.S. corn stocks totaled a greater-than-expected 8.605 billion bushels (bb) on March 1, it is almost certain that USDA will increase its estimate of U.S. ending corn stocks for 2018-19. Dow Jones' survey of analysts expects a higher estimate of 2.013 bb, which if true, would be down just slightly from 2.14 bb the previous year, keeping expectations for corn prices similar to what has been seen the past two years.
Coming off of Argentina's drought in early 2018, U.S. corn exports got off to a robust start in 2018-19, but the pace has dropped lately, and export commitments are now roughly 300 million bushels (mb) below USDA's estimated pace with five months to go in the season. The latest bearish pressure is coming from the anticipation of larger corn crops in South America and Tuesday's numbers will have something to say about that.
Dow Jones' survey expects USDA to increase its estimate of world ending corn stocks, from 308.53 million metric tons (mmt) in March to 312.4 mmt (12.30 bb) in April. Slight crop estimate increases are expected for Brazil and Argentina to 94.7 mmt (3.73 bb) and 46.8 mmt (1.84 bb), respectively. You have probably guessed by now that barring a surprise, USDA's corn estimates are likely to be bearish for corn Tuesday.
SOYBEANS
Unlike corn, USDA's finding of 2.716 bb of U.S. soybean supplies on March 1 was in line with market expectations, so USDA's new estimates for April probably won't be too different than what we saw in March. Dow Jones' survey expects USDA to peg U.S. ending soybean stocks at a record high 913 mb for 2018-19, up slightly from March's 900 mb.
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If there is a bearish surprise Tuesday, it may come from a reduction in the export estimate as total export commitments are roughly 170 mb below USDA's estimated pace. As we have mentioned often the past several months, predicting U.S. soybean exports and demand has been difficult this season due to not knowing how trade negotiations with China will go. To date, China's 25% tariff remains a bearish weight on U.S. soybean prices.
USDA's estimate of world soybean stocks at the end of August is expected to increase from 107.2 mmt to 108.4 mmt (3.98 bb), which, if correct, is up 9% from a year ago. Estimating world supplies of anything always takes more faith than evidence can justify and we have seen two significant revisions of past data by USDA in the past six months, which remind us these estimates are never etched in stone.
Supporting the notion of higher world soybean supplies in 2018-19, Dow Jones' analysts expect Argentina's crop estimate to come in at 55.5 mmt (2.04 bb), up from 37.8 mmt a year ago. Brazil's crop estimate is expected at 116.1 mmt (4.26 bb), down from 120.8 mmt a year ago.
Tuesday's new USDA estimates have a chance to be neutral for soybeans, and I hate to keep bringing up a sore topic, but the bigger issue for U.S. soybeans continues to be restoring trade with China.
WHEAT
Wheat prices have had some (but not many) bullish moments the past several years and it is difficult to remember the last time a WASDE report actually provided a bullish outlook for U.S. prices. It is safe to say that April's WASDE report will not be an exception. 1.591 bb of U.S. wheat stocks on March 1 meant that three quarters of wheat demand in 2018-19 was at its lowest in at least 14 years.
With such anemic demand, Dow Jones' survey of analysts expects USDA to increase its estimate of U.S. ending wheat stocks from 1.055 bb in March to 1.076 bb in April. The modest increase shouldn't necessarily result in lower wheat prices at this late point in the season, but it will again confirm long-held bearish views.
A sneak preview of USDA's May WASDE report is apt to reveal an early expectation for a larger world wheat crop in 2019-20. In Tuesday's numbers however, USDA's old-crop estimate of world ending wheat stocks is apt to increase only slightly, from 270.5 mmt to 271.1 mmt (9.96 bb), if Dow Jones' average estimate is correct.
USDA's April WASDE report is not known for big surprises, but we'll keep a watch all the same. Join us Tuesday at noon CDT for DTN's post-report webinar where I will review the day's numbers and answer your questions. Sign up for Tuesday's webinar at:
| U.S. ENDING STOCKS (Million Bushels) 2018-2019 | ||||||
| Apr | Avg | High | Low | Mar | 2017-18 | |
| Corn | 2,013 | 2,211 | 1,940 | 1,835 | 2,140 | |
| Soybeans | 913 | 1,062 | 847 | 900 | 438 | |
| Wheat | 1,076 | 1,103 | 1,045 | 1,055 | 1,099 | |
| WORLD ENDING STOCKS (Million metric tons) 2018-2019 | ||||||
| Apr | Avg | High | Low | Mar | 2017-18 | |
| Corn | 312.4 | 315.1 | 308.9 | 308.5 | 341.2 | |
| Soybeans | 108.4 | 114.6 | 106.5 | 107.2 | 98.6 | |
| Wheat | 271.1 | 274.2 | 268.5 | 270.5 | 279.6 | |
| WORLD PRODUCTION (million metric tons) 2018-19 | ||||||
| Apr | Avg | High | Low | Mar | 2017-18 | |
| CORN | ||||||
| Argentina | 46.8 | 49.0 | 46.0 | 46.0 | 32.0 | |
| Brazil | 94.7 | 95.0 | 94.4 | 94.5 | 82.0 | |
| SOYBEANS | ||||||
| Argentina | 55.5 | 56.0 | 54.5 | 55.0 | 37.8 | |
| Brazil | 116.1 | 117.0 | 115.0 | 116.5 | 120.8 | |
Todd Hultman can be reached at todd.hultman@dtn.com
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