April Supply and Demand Report Further Reduces U.S. Ending Stocks for Corn, Soybeans

Wednesday’s World Agricultural Supply and Demand Estimates (WASDE) reduced U.S. corn ending stocks to 1.331 billion bushels, lower than the expected 1.4 billion bushels. Domestic use for corn remained constant, but there was a 125 million bushel increase in corn exports. On the global corn market, ending stocks were reduced from 158.47 million metric tons to 158 million metric tons, which is in-line with market expectations. Global corn production was increased by more than 5 million metric tons, with Brazilian production increased by 2 million tons. Global consumption was also increased to offset the increase in production. The WASDE report in itself would be considered bullish for the corn market, but another report was released at the same time lowering Chinese imports by one million metric tons. As a result, July corn closed down 5 cents on the day. Among other news, Mississippi producers now have 41% of the corn crop planted compared to 46% a year ago and a 5-year average of 63%. The USDA is not yet reporting planting progress for the U.S. corn crop.

U.S. soybean stocks were reduced from 145 million bushels to 135 million bushels, lower than trade expectations of around 139 million bushels. With the reduction in April’s WASDE report, U.S. soybean stocks are now even tighter than they were a year ago when they were 141 million bushels. Exports were revised up by 50 million bushels while imports saw a 30 million bushel boost. A net increase of 20 million bushels traded on the global market is certainly no small amount considering such tight stocks. Globally, soybean ending stocks were reduced from 70.64 million metric tons to 69.42 million metric tons. Trade was expecting global ending stocks of 70.3 million bushels. Global production was reduced by about 600,000 metric tons, mainly from a one million metric ton decrease in Brazilian production. Soybean futures have reacted positively to the report, with July futures closing up 16 cents. Mississippi soybean producers are just starting to get soybeans planted. As of Sunday, April 6, Mississippi producers have 4% of the soybean crop planted, slightly behind the 5-year average of 7% for this time of year.

Both U.S. and global wheat stocks were increased in the April WASDE report. U.S. stocks were revised up from 558 million bushels in March to 583 million bushels in April, although the increase was in line with expectations. U.S. wheat imports were reduced, but were more than offset by reduced feed use. Globally, ending stocks were increased from 183.81 million metric tons in March to 186.68 million metric tons in April. The global stocks number came in much higher than traders expected, likely contributing to July wheat closing down 12 cents on the day. A large portion of the higher global wheat stocks comes from a decrease of 2 million metric tons in Chinese feed consumption. The cool spring has Mississippi’s wheat crop heading late this year. As of Sunday, April 6, only 1% of the state’s wheat crop has headed compared to a 5-year average of 21%. Although progress is behind normal, the wheat crop does look to be in good condition with 64% of the crop rated in Good or Excellent condition and another 30% rated Fair.