Tuesday morning’s monthly USDA supply/demand update did not contain any big news for the grain and soybean markets, as USDA made a small cut in the U.S. soybean carryout estimate, but left corn and wheat ending-stock projections unchanged.
As expected, USDA lowered its U.S. soybean carryout forecast due to reduced South American production and continued strong Chinese demand, but the cut to soybean stocks was not quite as large as the trade had anticipated due to weaker domestic demand.
USDA pegged 2008-2009 U.S. soybean ending stocks at 210 million bushels, down 15 million bushels from its January estimate and 5 million bushels above last year’s carryout. Trade estimates of the soybean carryout averaged 203 million bushels in a range from 123 million to 230 million bushels.
USDA raised projected U.S. soybean exports by another 50 million bushels, or 4.5% to 1.150 billion bushels, but cut its domestic crush forecast by another 35 million bushels, or 2.1%, to 1.650 billion bushels.
As a result of the slightly stronger overall demand, USDA raised its projection for the 2008-2009 average on-farm prices of soybeans by 25¢ on both the top and bottom ends to $8.75-9.75.
The only change USDA made on its U.S. corn supply/demand balance sheet was to narrow the projected range for the average 2008-2009 on-farm price from the previous forecast of $3.55-$4.25 to $3.65-$4.15.
USDA’s unchanged corn ending stocks estimate of 1.790 billion bushels may provide modest support for corn futures prices, as it should spur hopes that corn demand has now bottomed out. Trade estimates of the U.S. corn carryout averaged 1.838 million bushels in a range from 1.740 billion to 1.940 billion bushels.
It was no surprise that USDA did not changes its U.S. wheat supply/demand numbers as trade estimates of the wheat carryout averaged just 6 million bushels below USDA’s 655- million-bushel carryout projection.
The only change made on the U.S. wheat balance sheet was that USDA raised the low end of its projection for the 2008-2009 average on farm price of wheat by 20¢ and now sees the average price at $6.70-6.90.
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.