The USDA released its April World Agricultural Supply and Demand Estimates Report, and as expected, it was fairly quiet. Rich Nelson, the chief strategist from Allendale, talked about what he saw in the numbers.
“As far as controversy, you’re not going to find too much here, overall. The grain stock side of things, the USDA left all numbers for domestic corn unchanged. And keep in mind, we’re only talking about old crop. Next month is when the USDA starts adding the new crop numbers to this report. So unchanged in the corn. 2.1 billion bushels. World balance sheet, no change for Argentina or Brazil production. We will point out, though, that there is a big discrepancy growing between USDA and two private exchanges for Argentina’s corn numbers. USDA is at 52 (million). We now have one exchange up to 67 million tons, so there’s a big discrepancy there.”
Nelson talked about the soybean numbers.
“Soybean side of things, they were left unchanged on today’s report. USDA did raise domestic crush, which was needed, and they also lowered exports, which was also needed as well. We’ve been missing the USDA’s prior export goal in nine of 11 recent weeks.”
The only notable change came in the wheat numbers.
“We did see a minor change as far as the USDA wheat stock number that was raised by seven million tons on this report, to now 938 (million). Now they raised it by adding imports, so I’m a little surprised, as far as that goes. It did not recognize the fact that we have relatively good numbers for our discussion on export shipments. So overall, for the wheat side, it’s kind of more of a mixed tone. Maybe a light surprise on the foreign balance sheet. USDA adjusted their consumption estimate for India’s crop by five million tons, a bit larger than we’re expecting to see here.”
And there wasn’t any movement in cotton.
“It was left unchanged; no movements on supply, no movements on demand. And keep in mind, this 4.4-million-ton ending stock number is larger than the prior two years. Now we will have a large discussion in this market about new crop acreage for cotton, especially given this drought situation, which is not being fixed really well.”