U.S. wheat and soybean ending stocks are not accelerating as much, according to the USDA on Tuesday.
In its supply / demand and WASDE reports in February, the USDA carried higher estimates for maize and soybeans than trade estimates, resulting in a light market response.
At the end, the wheat futures market ended 7 ¢ lower in March at $ 5.56 3/4. May have settled wheat futures 7 1/4 ¢ lower at $ 5.54 1/2. New Harvest December wheat contracts closed 2 1/2 ¢ lower at $ 4.55 3/4.
March soybean futures ended 14 1/4 ¢ higher at $ 14.01 3/4. May soybean futures ended 12 3/4 ¢ higher at $ 13.98 3/4. New harvest futures in November are 11 ¢ higher at $ 11.90 3/4.
Wheat futures contracts in March settled 6 3/4 ¢ lower at $ 6.49 1/2.
March’s soybean futures ended $ 2.10 higher in the short term at $ 438.70.
The futures contracts for soybean oil in March closed 0.89 higher at 46.52 ¢ per pound.
In foreign markets, the NYMEX crude oil market is $ 0.46 per barrel higher (+ 0.79%) at $ 58.43. The US dollar is lower and the Dow Jones Industrials are 44 points higher (+ 0.14%) at 31,430 points.
American exit
On Tuesday, the USDA linked US 2020/2021 soybean transportation at 120 million bushels against expectations of trading at 123 million bushels and the USDA’s estimate in January of 140 million bushels.
For wheat, the USDA sees that the stock for 2020/2021 is 1.50 billion bushels against the trade expectation of 1.39 billion bushels and the estimate in January of 1.55 billion bushels.
US wheat ending stocks were set at 836 million bushels against the trade expectation of 834 million and the USDA’s estimate in January of 836 million.
World Stocks
In its report, the USDA ended the world stockpile for 2020/21 wheat at 286.5 million tons against the trade expectation of 279.79 million tons and the USDA’s estimate in January of 283 mmt.
For soybeans, the global ending stock was set at 83.4 mmt. against the trading expectation of 83.30 mmt. and the USDA’s January estimate of 84.31 mmt.
For wheat, world ending stocks were set at 304.2 mmt. against the trade’s expectation of 312 mmt. and the USDA’s estimate in January of 313 mmt.
South America’s crop production
The USDA linked Brazilian soybean production 2020/2021 to 133.0 mmt. against the trading expectation of 133.0 mmt. and the USDA’s estimate in January of 132 mmt.
For the wheat production of Brazil it was 109 mmt tied. against the trade’s expectation of 108 mmt. and the USDA’s estimate in January of 102.0 mmt.
For Argentina, the USDA linked its soybean yields to 48.0 mmt. against the trading expectation of 47.6 mmt. and the USDA’s January estimate of 48.0 mmt.
The wheat production of Argentina is 47.5 mmt. against the trading expectation of 47.0 mmt and the USDA’s January estimate of 47.5 mmt.
Trade reaction
Peter J. Meyer, S&P Global Platts, head of grain and oilseed analyzes, says the wheat market was disappointed with just a 50 million increase in wheat exports.
“Many, including S&P Global Platts, expected an increase of 150 million ships on the heels of the Chinese record at the end of January, but the USDA’s World Council remains reactive rather than proactive,” Meyer said.
Meyer added: ‘The structural imbalance, demand minus production, in China now stands at 28.3 million tonnes. against our 29 million MT. forecast. We believe that the number could reach 32 million tons. next year, increasing Chinese wheat imports as high as 30 million MT in 2021-22, compared to the current USDA estimate of 24 million MT for the current marketing year. The imbalance is more than ten million year-on-year higher, something we believe will continue to grow. No changes to South American wheat production were expected. ”
Soybeans were much less of a story. The USDA has, as expected, increased U.S. soybean exports by 20 million bushels. Soybean production in Brazil and Argentina was left unchanged, Meyer said.
Will Gilbertie, Teucrium Trading, agree that the markets were disappointed with the USDA wheat use numbers, which were largely below expectations in all categories.
‘Soybeans remain tight, and the USDA raises soybean export numbers in the U.S. to the higher end of trading expectations. Soybeans can buy a few hectares of acres if the estimates in this report are stable during the WASDE release in March, ‘says Gilbertie.