USDA tightened its forecasts of 2010-11 ending stocks for U.S. and world soybeans in the December supply and demand report released early Friday.
The cut was within the range of pre-report estimates and just a few million bushels below the average, so the report should be viewed as neutral to bullish for soybeans when trade resumes later this morning, said DTN Analyst John Sanow.
“There were no real surprises on the U.S. side of the ledger,” Sanow said of the latest supply and demand numbers. “Look for today’s report to have little impact on market direction.”
This round of monthly reports only included supply and demand tables; USDA’s final numbers for U.S. row crop and oilseed production will be released in January.
For World Agricultural Supply and Demand Estimates (WASDE): https://www.usda.gov/…
For Crop Production report: https://usda.mannlib.cornell.edu/…
In the U.S. tables, USDA’s World Ag Outlook Board raised ending stocks of corn to 832 million bushels, up from 827 million bushels in the November report and within the pre-report estimates. The increase reflects a 5-million-bushel hike in imports from Canada, which had a larger crop. All U.S. numbers were left unchanged from November. The report should be viewed as neutral to bearish for corn, Sanow said.
“Some may look at the 5 mb increase in corn ending stocks as surprising, considering the average pre-report estimate called for a reduction of 24 mb; however, the strengthening carry in futures spreads recently indicated this was possible,” Sanow said.
USDA now pegs soybean ending stocks at 165 million bushels, down 20 m bu from the 185 m bu forecast in November, and below the average pre-report estimate of 167 m bu. USDA now forecasts soybean exports at 1.59 billion bushels, up 20 m bu from last month; all other usage numbers were unchanged.
In the wheat supply and demand table, USDA raised 2010-11 ending stocks by 10 million bushels, to 858 m bu, 9 million above the average guess of 849 m bu. The increase is a result of a cut of 10 m bu in food use of wheat. The report should be viewed as neutral for wheat, Sanow said. “The slight increase in wheat stocks will be met with not much more than a yawn.”
WORLD ENDING STOCKS
In the world tables, USDA greatly eased its forecast for 2010-11 wheat stocks, slightly eased 2010-11 corn stocks, but tightened soybean ending stocks.
World ending stocks should be viewed as neutral for corn, neutral to bullish for soybeans, and slightly bearish for wheat, Sanow said. “As with the domestic side, world numbers were largely uneventful.”
Corn ending stocks were raised to 130 million metric tons, up from 129.16 in the November report. Argentine and Chinese production was left unchanged.
In soybeans, USDA cut world ending stocks to 60.12 MMT, from 61.41 MMT in November. Production for both Brazil and Argentina was left unchanged. “A decrease in bean stocks was largely due to increased demand from China,” Sanow said.
In the world wheat supply and demand table, USDA took ending stocks up 4 MMT, to 176.72 MMT from 172.51 MMT in the November report. USDA raised both Australian and Canadian production by close to 2.5 MMT combined. Russia was lowered by 500,000 tons to 41.5 MMT; the EU-27 production estimate was left virtually unchanged.
“The large gain in global wheat stocks was mostly tied to higher production in Australia and Canada,” Sanow said. “However, Australian production should come with an asterisk because a high percentage of their crop will be classified as feed grade.”
The next major update from USDA will be Jan. 12, when the department releases its annual 2010 crop production report, the Dec. 1 stocks report, the 2010 winter seedings report and the January supply and demand report.
Source: DTN
Posted with DTN Permission by Haylie Shipp
