March 8 – Instant Reaction to the March WASDE Report
It’s March 8, 2018. What could that possibly mean? Oh… that’s right it’s time for the WASDE report.
Just five minutes before the report dropped, here is where prices sat in Chicago.
  • May SRW Wheat: $4.9225 (down 4.5 cents)
  • Corn for May: $3.885 (up 1 cent)
  • May Soybeans: $10.6625 (up 1 cent)
Yeah, there wasn’t much going on.


Let’s Dig into the 12 pm March WASDE Report

At 12 pm, the WASDE report was generating less interest than President Trump’s talk on tariffs.
But for those who were digging into the numbers today are getting themselves a present.

Soybean Prices Retreat

Soybean prices were off 2.25 cents about 10 minutes after the release of the report.

A small uptick in U.S. stocks likely offset any optimism about a more important figure (in my opinion).

As I said this week, my focus immediately turned to South America. The USDA made a huge cut to its Argentina production figure. The agency went from a February figure of 54 MMT in Argentine soybean production to 47 MMT in March.

The average trade estimate for Argentine soybeans was 48.4 MMT.

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 555,000 MT, 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.

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.

Other key figures that I found intriguing:

Global soybean production fell from 346.92 MMT to 340.86, a result of the agency’s sharp cut in Argentina.

Brazilian exports increase from 69.00 MMT to 70.50 MMT. Meanwhile, U.S. exports were cut from 57.15 MMT to 56.20 MMT. Those changes are likely a reaction to China’s increasing shift from U.S. to Brazilian soybeans.

Soybean stocks in Brazil fell from 35 MMT to 31.2 MMT.

Corn Prices Tick Higher

The world is less awash in corn than it was last month.

The USDA said that global ending stocks came in at 199.2 MMT. That figure is about a 3.9 MMT decline from the February estimate of 203.1 MMT.

There was also a big cut in U.S. corn inventories. The agency cut its corn ending stocks figure to 2.127 billion bushels. That figure is down sharply from the 2.352 billion estimate in February. The average trade analyst figure was 2.312.7 billion.

The USDA’s cut came on the back of ethanol and exports. The agency increased ethanol use by 50 million bushels. It also hiked exports by 175 million bushels to 2.225 billion bushels. The USDA cited “U.S. price competitiveness, rec0rd-high outstanding sales, and reduced exports from Argentina.”

Meanwhile, we saw production in South America take a bit of a hit. 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 reduced 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.

Other key figures that I found intriguing:

Chinese stocks remained unchanged at 79.55 MMT. However, their domestic feed figure increased from 166 MMT to 167 MMT.

The USDA increased its Brazilian beginning stocks from 11.72 MMT to 14.02 MMT. The country’s end stocks increased by 800,000 MT to 11.42 MMT.

The agency slashed Brazilian production based on a smaller-than-expected increase in second-crop acreage.

Wheat Prices Dip on March WASDE Report

Wheat prices dipped after the USDA offered a few slightly bearish numbers in the March WASDE report.

The key figures to watch was on ending stocks in the U.S. and on the global front. 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.

U.S. wheat ending stocks came in at 1.034 billion, about a 25-million-bushel increase. 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, in what appears to be either an Excel error or just someone looking for attention. Russia’s exports were raised from 36 MMT to 37.5 MMT. The nation’s stocks were lowered from 15.33 MMT to 13.82 MMT. This suggests that the nation’s infrastructure are improving and bottlenecks are being alleviated.

Other key figures that I found intriguing:

The USDA lowered Hard red winter wheat exports by 15 million bushels.

The USDA lowered Hard spring wheat exports by 10 million bushels.

Argentina’s production total was unchanged at 18 MMT.

So what is the conclusion that we can take away…
I looked on Twitter for more reactions, and…

Hey… I Know This guy! 

March is in! – you’re drunk & someone is going to take advantage of you

A bit

More neutral than outright bearish for (& !)

Tune into your account for a full recap, plan moving forward

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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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