It was a shockingly… non-volatile day in the grain complex after the March WASDE report.
We saw gains today in wheat prices and corn prices.
Soybean prices remained stable before closing the day with smaller losses.
Here are the key numbers from the March WASDE report.
It was a day of weighing South American production figures against global and U.S. carryout numbers.
In that battle, however, neither side appears to have won.
Let me explain as we dive into our daily recap of the March WASDE report and trading at the Chicago Board of Trade.
Soybean Prices Dip on March WASDE Report
In Chicago, May soybean prices dipped 1.25 cents to close the day at $10.64 per bushel. The July contract shed a penny to finish at $10.73, while the August contract added 0.25 cents to end at $10.735.
The big news centered on WASDE.
The USDA made slashed its February Argentina production figure of 54 MMT in Argentine soybean production to 47 MMT in March. The average trade estimate for Argentine soybeans was 48.4 MMT.
This was a massive cut. As we noted earlier this week, we were not expecting that much of a cut.
Meanwhile, the agency only offered a 1 MMT increase in Brazilian production to 113.0 MMT. That was 800,000 MT lower than the average trade estimate.
The other key figures were at the global inventory and U.S. inventory level.
U.S. soybean ending stocks came in at 555 million bushels, a figure that was more than 25.6 million bushels higher than trade estimates. The figure was also 25 million bushels higher than the agency’s February estimate. The other factor was that the USDA saw a bigger use number on crush and a small downturn on exports.
On the global front, global soybean stocks fell by 3.7 MMT on the month. The USDA pegged world ending stocks to 94.4 MMT, down from 98.1 MMT in February. The average trade estimate was pegged at 95.3 MMT.
But that’s not all that happened in the complex today.
Today, the USDA reported that weekly export sales came in 2.51 MMT.
That was three times the amount from the previous week.
Corn Prices Tick Higher
Today, May 2018 corn prices pushed higher. The contract added 6.25 cents to close the day just under $3.86 per bushel. The July contract ticked above $4.00.
Before we get to the important numbers on the WASDE report, let’s look at exports.
The USDA said that weekly export sales came in at 1.857 MMT, a figure that was about 8.2% higher than last week.
Aside from that… it was all about WASDE and the big drop in inventory levels.
The USDA slashed U.S. corn ending stocks to 2.127 billion bushels. That figure is down sharply from the 2.352 billion estimate in February. The average trade analyst figure was 2.312 billion.
The USDA said that global ending stocks came in at 199.2 MMT.
That figure was a noticeable drop from the February estimate of 203.1 MMT.
Of course, I was really focusing on South America today.
I was expecting a hit, and it came, The USDA cut its Argentine production total from 39.0 MMT to 36.0 MMT. The average trade forecast was 36.6 MMT.
The agency also slashed its Brazil production figure from 95.0 MMT to 94.5 MMT. The March figure was actually higher than the average trade estimate of 92.2 MMT.
Wheat Prices Mixed on March WASDE Report
Wheat prices pushed higher on Thursday in Chicago.
May SRW contracts in Chicago added 2 cents to close the day just above $4.99 per bushel. The July contract added another 2.25 cents to end the day at $5.1525.
In Kansas City, HRW contracts for May dipped 1 cent to close at $5.3325. The July contract shed a penny to close the day at $5.50.
Prices didn’t’ move too much due to the lukewarm data we saw today from the WASDE.
In addition, the USDA reported that old crop exports came in at 391.476 MT last week, which was pretty much dead center of trade expectations. The number was also very similar to the export total from the same time last year.
So, what happened with the WASDE?
We saw an uptick in both figures. The agency slashed wheat exports for 2017/18 by 25 million bushels to 925 million. The agency blamed “price competitiveness” in several global markets. That’s code word for “Russia.”
The USDA lowered Hard red winter wheat exports by 15 million bushels.
The USDA lowered Hard spring wheat exports by 10 million bushels.
U.S. wheat ending stocks came in at 1.034 billion, thanks to a 25-million-bushel decrease in exports. Meanwhile, global inventory levels increased from 266.1 MMT to 268.9 MMT. The average trade estimate was actually lower than the February figure at 265.6 MMT.
Russian production was cut from 85 MMT to 84.99 MMT.
Russia’s exports were hiked from 36 MMT to 37.5 MMT.
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