USDA Reports Preview

Fresh off USDA's March 31 report of March 1 grain stocks, USDA will incorporate the latest stocks estimates into the April World Agricultural Supply and Demand Estimates (WASDE) report. This particular report is usually a low-key affair, but in the era of coronavirus, a surprise may be in store. Thursday's numbers are likely to show some influence from the anticipation of lower grain demand ahead.

CORN

Like it or not (and most of us will vote not), the spread of coronavirus and efforts to slow the spread have dominated ag markets for over a month. For corn prices, the effect has been especially bearish. Coming off USDA's lower-than-expected March 1 corn stocks total of 7.953 billion bushels (bb), we would normally expect to see higher demand estimates in the April WASDE report.

This year, however, that bullish adjustment will likely be outweighed by two bearish demand adjustments -- one for exports and one for ethanol. U.S. export commitments for corn are currently down 26% from a year ago and are slowly improving but will struggle to reach USDA's export estimate of 1.725 bb. Ethanol production dropped 19% the past two weeks, a consequence of Saudi Arabia's oil price war at a time when the coronavirus has us all driving less.

Dow Jones' survey of analysts expects USDA to increase the estimate of U.S. ending corn stocks from 1.892 bb to 1.990 bb, a modest increase that has potential to go higher Thursday, depending on how aggressive USDA wants to be about its demand reductions.

Beyond the U.S., Dow Jones' survey expects world ending corn stocks to be increased slightly, from 297.3 million metric tons (mmt) to 298.5 mmt (11.75 bb). A slightly lower crop estimate of 100.3 mmt (3.94 bb) is expected for Brazil, and a slightly lower estimate of 49.7 mmt (1.96 bb) is expected for Argentina.

If you have been wondering when USDA might release its new survey of corn and soybean production in Northern states, National Agricultural Statistics Service (NASS) announced on April 7 that the survey will be conducted later in April and will be released in the May Crop Production report, if the numbers differ from the January NASS estimates. Because harvest in North Dakota needs more time, the survey for North Dakota will be conducted at a later date.

SOYBEANS

For soybeans, the 2.253 bb of supplies USDA found on hand for March 1 was slightly higher than expected and shouldn't have much effect on Thursday's new demand estimates.

However, Dow Jones' pre-report survey does expect USDA to increase its estimate of U.S. ending soybean stocks, from 425 mb to 444 mb. The increase will likely be pinned on the sluggish pace of soybean export sales. As of March 26, U.S. soybean export commitments were down 15% in 2019-20 from a year ago, well below pace from the 4% increase USDA is currently projecting.

For USDA's world estimates, Dow Jones' survey expects soybean stocks to be lowered slightly, from 102.4 mmt to 101.9 mmt (3.74 bb). The crop estimate for Brazil is expected to be trimmed from 126.0 mmt to 124.2 mmt (4.56 bb). Argentina's crop estimate is expected to come down from 54.0 mmt to 52.7 mmt (1.94 bb) -- both due to recent stretches of drier weather.

WHEAT

Similar to corn, U.S. wheat stocks on March 1 were a little less than expected at 1.412 bb and give Thursday's demand estimates the right to a slight bullish adjustment. Exports, however, are not quite up to pace for reaching USDA's 1.000 bb export estimate and may be lowered Thursday.

Dow Jones' survey expects USDA to slightly increase its estimate of U.S. ending wheat stocks for 2019-20 from 940 mb 945 mb. If true, the small change is not likely to have much price impact.

USDA's estimate of world ending wheat stocks is expected to be tweaked slightly lower, to 287.0 mmt (10.55 bb) for 2019-20, but the market is more interested in new-crop estimates these days, something USDA won't provide until the May WASDE report.

In general, April WASDE reports don't typically show much price movement as May corn prices have held within a 2 1/2 cent change after four of the past five April reports. This year, though, has already proved itself to be unusual, and surprises are possible.

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Join us for a post-report webinar at noon CDT on Thursday, April 9. After discussing USDA's latest estimates, DTN's Senior Ag Meteorologist Bryce Anderson will offer his latest comments concerning spring weather. Register now at: https://dtn.webex.com/…

WORLD PRODUCTION (million metric tons) 2019-20
	Apr	Avg	High	Low	Mar	2018-19
CORN
Argentina		49.7	51.7	49.0	50.0	51.0
Brazil		100.3	101.1	99.0	101.0	101.0
SOYBEANS
Argentina		52.7	54.0	51.0	54.0	55.3
Brazil		124.2	126.0	123.0	126.0	117.0
U.S. ENDING STOCKS (Million Bushels) 2019-20
	Apr	Avg	High	Low	Mar	2018-19
Corn		1,990	2,150	1,790	1,892	2,221
Soybeans		444	504	400	425	909
Wheat		945	999	910	940	1,080
WORLD ENDING STOCKS (million metric tons) 2019-20
	Apr	Avg	High	Low	Mar	2018-19
Corn		298.5	301.0	293.0	297.3	320.8
Soybeans		101.9	104.9	98.5	102.4	111.9
Wheat		287.0	291.0	283.9	287.1	277.6

Todd Hultman can be reached at todd.hultman@dtn.com

Follow Todd Hultman on Twitter @ToddHultman1

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