Few Surprises in June Supply and Demand Estimates

Wednesday’s World Agricultural Supply and Demand Estimates (WASDE) left both new and old-crop U.S. corn ending stocks unchanged from a month ago. U.S. new crop corn production is unchanged at 13.935 billion bushels despite an extremely favorable 75% of the U.S. crop rated in good or excellent condition in Monday’s crop progress report. New crop ending stocks are estimated to be 1.726 billion bushels, while old crop ending stocks are estimated to be 1.146 billion bushels. On the global corn market, ending stocks for the 2014/15 crop are estimated to be 182.65 million metric tons, an increase of just under one million metric tons from last month. Much of this increase is the result of higher production in Russia, Ukraine, and the European Union.

Old crop U.S. soybean stocks were reduced another 5 million bushels from last month’s estimate to 125 million bushels, lower than trade expectations of 127 million bushels. If realized, the 2013/14 ending stocks number would be the third smallest since 1970, while the stocks-to-use ratio will be the smallest on record. Old crop soybean crush was revised up by 5 million bushes while other disappearance remained unchanged. New crop 2014/15 soybean ending stocks are expected to be more than double the old crop stocks at 325 million bushels. Production remained unchanged at 3.635 billion bushels, which if realized would be a record crop. Soybean disappearance also remains unchanged for the new crop production year, with the only change on the balance sheet coming from a lower carryover from the old crop year. Global soybean ending stocks were raised by 550,000 metric tons from May’s estimates, with much of the increase coming from a larger carryover and slightly higher production.

The new crop 2014/15 wheat ending stocks were raised by 34 million bushels from the May report. Poor wheat conditions have resulted in the USDA revising wheat yields down by 0.4 bu/acre to 42.3 bu/acre. Production is down 21million bushels from last month while beginning stocks are 10 million bushels higher as a result of lower old-crop exports and food use. U.S. food use and feed use for wheat were both revised down 10 million bushels from last month. U.S. wheat exports were revised down 25 million bushels from last month. Globally, 2014/15 wheat ending stocks were increased by 1.19 million metric tons with 4.58 million ton increase in global wheat production. Global feed use and exports are revised higher to partially offset the increase in global production. The European Union, China, Russia, India, and countries in the former Soviet Union all saw upward revisions in production.