With all the drama around politics in the US the media generally brushed the monthly USDA World Ag Supply & Demand Estimates report under the carpet. Well at least until it was announced, then the market took some notice.
The USDA increased corn and soybean production estimates in the USA. This sent futures markets tumbling dragging wheat lower. Corn saw the average yield increased to 11.00t/ha. This rolls out to around 387 million tonnes, I remember when they cracked 300 million tonnes for the first time back in 2007 and they thought that was huge.
On the demand side ethanol production in the US was increased thus consumed some of the excess corn but a large slice of the increase has simply ended up as carryover stock.
Soybeans didn’t escape and higher yields across the central corn belt saw production increased to 118.69mt, +2.5mt. Although US bean crush numbers were reduced total exports were increased but ending stocks still increased by 2.3mt. The USDA did increase their expected price range for soybeans by 15c/bu though. Given the numbers, that is looking pretty optimistic.
The bad news for soybeans didn’t end there though as the USDA also increased ending stocks in China and Argentina. Kind of makes you wonder how they managed to increase US exports doesn’t it.
Wheat saw global ending stocks increased by 800kt, not a downgrade of 500kt like the punters were backing.