South American weather forecasts have influenced United States grains markets, but not the USDA’s monthly Supply and Demand report. A commodities broker breaks down the report below.
The U.S. Department of Agriculture today released its December World Agricultural Supply and Demand Estimates report, which revealed minor adjustments to domestic supply.
No changes were made to U.S. corn ending stocks. However, “On the soybean side is where it gets a little bit strange,” says Greg McBride, Allendale commodities broker.
“We were looking for about a 25- to 30-million decrease, and we only got a 15 million bushel decrease. The expectation was that the USDA was going to make a change to exports to bring that ending stocks number down. They made no changes to exports, but did increase crush,” McBride says. “This doesn’t change the friendliness of the ending stock number, it’s just disappointing compared to what the trade was looking for.”
Disappointment carried over into the global scene, as no changes were made to Brazilian corn and soybean production.
“There was a reduction in Argentina, of about one-million metric tons for both corn and beans. That was expected,” McBride says. “The disappointment, again on the Brazil side, was that we were looking for a decrease there, but didn’t get it. The USDA just kicked the can, maybe for the January report.”
All-in-all, today’s report showed “friendly numbers.” McBride believes ending stocks will linger “until we see where South America’s crop come in.”
