USDA releases benign supply, demand report

CHARLOTTE, Mich. — The U.S. Department of Agriculture’s supply and demand report numbers came in near expectations across the board as the trade turns its focus to the prospective plantings and quarterly stocks estimates later this month.

Angie Setzer and Karl Setzer, copartners at Consus Ag Consulting, hosted a live podcast on X, formerly Twitter, as the USDA balance sheets were released.

The trade expected some slight adjustments in the report, but USDA opted to not make any changes to the corn and soybean balance sheets. What were those trade estimates versus the report’s reality?

Angie: Trader expectations coming into the report was a slight reduction for corn carryout. The average trade guess was 2.159 billion bushels, down just a bit from 2.172 billion last month.

A lot of folks were anticipating an increase in corn use for ethanol in the March numbers. USDA kept the corn carryout at 2.172 billion bushels.

Soybean carryout was expected to come in at 319 million bushels. The trader range is 295 million to 350 million bushels.

There was some talk that maybe USDA would adjust exports again, although they have been relatively aggressive in that respect. Soybean carryout was unchanged in the report at 315 million bushels.

Did the wheat domestic balance sheet follow suit with the other crops?

Angie: Traders were expecting about 657 million bushels versus 658 million last month. Wheat was really the only thing that you could call surprising, and it really wasn’t much.

They came in with a little less in the way of exports than what was anticipated and that bumped up carryout by about 15 million bushels. Most of those adjustments were in hard red winter wheat.

What were some highlights on the global balance sheets?

Angie: Traders were expecting a cut in Brazilian corn production. The trade expected another cut on Brazil’s soybean production by USDA. The average trade estimate for Brazil soybeans going into the report is 152 million metric tons versus the 156 million USDA had last month.

The Brazilian corn crop estimate was unchanged like we had anticipated. The Brazilian beginning corn were increased slightly. The Brazil soybean crop was reduced by 1 million metric ton down to 155 million.

USDA did raise Brazil’s exports. That was an interesting adjustment to see them do that in this month’s number, raising Brazil’s expectations by about 3 million metric tons from last month.

World corn carryout came in at 319.63 million tons, a little lower than the traders’ expectations of 320.4 million.

The world soybean carryout came in lower than what was anticipated at 114.27 and that was in line with trade expectations. The average trade guess was 114.3 million.

World wheat ending stocks came in a little lower than what traders were expecting at 258.83 million metric tons. The trade was expecting about 259.1 million metric tons.

What are your overall thoughts on these new numbers and any expectations going forward?

Angie: The numbers today said nothing, and so now as the time goes on and we look ahead we’re going to be watching to see if there’s any additional signs of export business.

Really when it comes down to it, corn exports have been pretty solid outside of China. China’s purchases are running about 3 million metric tons behind where we were a year ago. There’s been some rumors that they’ve been sniffing around for some values.

We’ve seen the cash market show some signs that something is happening, either there’s a slight physical short on the river here for the month of March or we’ve seen an increase in demand here on the short-term, because we did see basis firm up a bit yesterday.

If we see China pop in and decide they are going to buy a couple million metric tons of corn, I’m not saying that we run to $6 by any means, but that would be supportive for us just with how well we’ve been doing from an export standpoint with our usual suspects.

We’ve seen Japan come back in and buy a bunch more than what we had seen a year ago, and Mexico obviously has bought more corn so far than what you would traditionally see in a normal year. Columbia has been in and buying big.

So, there’s some positive things out there. Today’s report not saying anything, just kind of removes one more potential hurdle. Though I didn’t anticipate it to say much of anything that would be overly surprising.

Now we look ahead to what the planting intentions report says. More private planted acres surveys will also be coming out.