USDA’s supply/demand estimates for ending stocks moved in the direction the trade expected, with the exception of corn, which was left at 647 million bushels rather than the average increase to 666 million the trade expected (range 493-752). USDA made no changes to its balance sheet, but reduced its price range to $6.80-8 from November’s $6.95-8.25.
Soybean ending stocks fell 10 million bushels to 130 million on stronger domestic crush; the trade average was 135 (123-145). As we have been pointing out, exports of soybean oil and meal have been stronger than expected, leading to strong crush. USDA raised its oil exports to 1.8 billion pounds from 1.2 billion last month and meal to 8.2 million tons from 7.9 in November.
The wheat ending stocks number was bearish, jumping 50 million bushels higher to 754 million, when the trade only expected a 14-million boost to 718 million. The entire boost was due to a reduction in exports, now pegged at 1.05 billion. Feed use was left unchanged.
While there was some concern going into the report that cotton exports could be lowered due to India’s continued activity in world markets, instead, USDA raised exports by 200,000 bales to 11.8 million and reduced end stocks by a like amount, to 5.4 million bales.
Rice exports were raised from 103 million cwt. to 105 million, but the increase was offset by a matching reduction in domestic use, leaving end stocks at 30.1 million.
As often is the case, USDA didn't make any major changes to its world balance sheets. It left Brazil's corn production estimate unchanged and trimmed Argentina's only 500,000 mmt, to 27.5 mmt versus the trade's expectation of a cut to 26.1 mmt. World ending stocks fell only 380,000 mmt. Both Argentina's and Brazil's soybean crops were unchanged; global ending stocks were pegged at 59.93 mmt, down minimally from 60.01 last month. World wheat ending stocks, however, were bearish, having risen 2.77 mmt to 176.95.
Editor’s note: Richard Brock, Corn & Soybean Digest's marketing editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.