Live WASDE Report: May 2018 WASDE Recap 

(11:45 EST) – Today, the USDA will release the May WASDE report. (Scroll down for the recap…)

It’s also Bono’s birthday.

“I would buy $12 calls… only to be with you..” – Lyrics that didn’t make the final cut in I Still Haven’t Found What I’m Looking For

But there’s only one thing on Bono’s mind today…

“Whoa-oh-oh, the sweetest corn…”

 

As I noted yesterday, the USDA will release its first forecasts on U.S. production and carryout for 2018/19.

The same goes for production and inventory levels around the globe.

Today, we’re focusing on several different numbers for the major crop categories.

These key figures include:

  • Corn: Brazilian production, U.S. production estimates, and global carryout.
  • Soybeans: U.S. exports, Argentine production, global carryout, and Chinese imports
  • Wheat: U.S. production and carryout, Russian exports, and Chinese inventory levels.

Let’s see what people were saying before the WASDE report hits our desks at 12 p.m. EST.

Looking good… Billy Ray!

Are you sure you haven’t started drinking already?

Matt does not seem to be as excited as Top Third Ag…

But Hindsight Capital seems pretty relaxed right now…

Let’s also see how grain prices traded 20 minutes before the May WASDE report.

  • July Corn: Down 1.25 cents at $4.015.
  • September Corn: Down 1.75 cents at $409.5.
  • July Soybeans: Up 1 cent at $10.1675.
  • August Soybeans: Up 1 cent at $10.2025.
  • July Chicago SRW Wheat: Down 1 cents at $5.095.
  • September Chicago SRW Wheat: Down 1.25 cents at $5.26.
  • July K.C. HRW Wheat: Up 1.25 cents at $5.3275.
  • September K.C. HRW Wheat: Up 1 cents at $5.5075.
  • July MGEX Spring Wheat: Down 2 cents at $6.0925.
  • September MGEX Spring Wheat: Down 1.75 at $6.16.
  • July Oats: Up 3.25 cents at $2.3475.
  • September Oats: Up 1.25 cents at $2.46.

Okay… It’s almost time to dive into the May 2018 WASDE report. Check back for more of our insight and analysis as we pour through the data.

May 2018 WASDE Report Recap

The USDA has just released the May 2018 WASDE report.

What mattered most today?

Take it away, Meghan Vick…

There is a ton of information to digest, so let’s get moving and dive into the numbers…

U.S. Soybean Numbers Look Bullish (12:15 EST)

U.S. Soybean prices ripped higher at 12 p.m.

Minutes after the release, July soybean prices added 13.25 cents to hit $10.29. The August contract was back above $10.33 after gaining 14.5 cents.

Here’s why…

Today’s report indicated higher exports and crush in 2018/19 than the same categories in 2017/18. In addition, the agency projected production at 4.28 billion bushels, which is about a 112 million bushel decline from the previous year.

In addition, the USDA projects lower carryout in 2018/19. It also projects… wait for it… higher exports.

FarmPolicy’s Twitter Feed has been a river of information today…

Ending stocks are pegged at 415 million bushels, down from the 530 million projected for the end of 2017/18. The average trade estimate heading into the report called for 533 million bushels for stocks.

Down in South America, the USDA made a few revisions to 2017/18 production for Argentina and Brazil. The agency cut its projection for Argentine soybeans from 40 MMT in April to 39 MMT in May.

It’s important to note that a reduction in stocks down in South America is likely to reduce export competition for the United States in the coming six months.

This is critical at a time that the U.S. is facing uncertainty around its trade relationship with China.

The USDA now says that Brazil’s 2017/18 crop came in at 117 MMT, which was a 2 MMT.

The agency has projected that Argentina will produce 56 MMT of soybeans in 2018/19, while Brazil will produce 117 MMT. Global production is pegged at 354.54 MMT, about an 18 MMT (5.2%) increase from the previous year. Also worth noting is that the USDA is expecting Paraguay’s soybean exports of 6.25 MMT to top Argentina’s volumes for the first time ever! The latter is only expected to ship out 4.2 MMT.

Corn Prices Breakout on Production Numbers (12:30 EST)

Corn prices pushed higher at 12:30 p.m. EST with the release of the WASDE report.

July corn prices held above $4.04 thanks to a 2-cent gain. The September contract was at $4.125 after a 1.5-cent gain. Here’s what happened in the corn complex.

The USDA projected that U.S. corn yields will hit 174.0 bushels per acre in 2018/19 (down from 176.6 bpa in 2017/18). That figure will complement lower production of about 14.0 billion bushels.

The chart below provides a historical glimpse of U.S. corn production.

The USDA projected that corn stocks would come in around 1.682 billion in the year ahead. that figure was slightly above trade expectations for the month. Still, that figure is about a 500-million-bushel decline from the 2017/18 figure. The chart below offers a glimpse of ending stock projections from Thursday’s report.

The downturn in corn stocks is largely tied to a rise in domestic use and a smaller corn crop and lower yields. Total production is pegged at 14.04 billion bushels, down 3.9% from last year.

With that in mind, global corn stocks are also expected to fall. As the chart below notes, global corn stocks are pegged to come in at 194.85 MMT. This was about a 3 MMT drop from the April WASDE report.

Wheat Production Set to Rise (1 p.m. EST)

Wheat prices went in the opposite direction. That’s largely because the USDA projected that the 2018/19 wheat crop will increase by 5% in size.

The agency says that farmers will plant 47.3 million acres, up from the 46 million acres from last year.

A combination of higher acreage and improved yields pushed U.S. projections to 1.821 billion bushels. The chart below provides a historical breakdown of U.S. wheat production.

 

The agency pegged this year’s yields at 46.8 bushels per acre.

That’s a slight uptick from the 46.3 bushels per acre from the previous year.

Still, it’s important to note that U.S. winter wheat yields are expected to come in lower in key producing states due to the impact of local drought.

The agency pegged ending stocks down at 955 million bushels for 2018/19. That figure is down from the 1.07 billion bushels slated for 2017/18. The chart below provides a glimpse of ending stocks for 2017/18 for the major crop categories.

Right now, we’ve got to shift our focus over to our GrainCents subscribers. We’re going to be doing a deeper dive into today’s figures and providing pricing recommendation for readers over the next month.

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About the Author
Garrett Baldwin

Garrett Baldwin is a content strategist and editor at FarmLead. He covers the global grain markets and public policy issues related to the agricultural industry. He is a graduate of the Medill School of Journalism at Northwestern University. He also holds a Master’s Degree in Economic Policy from The Johns Hopkins University, an MS in Agricultural Economics from Purdue University, and an MBA in Finance from Indiana University.

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