The United States Department of Agriculture (USDA) on Tuesday released it’s April Supply and Demand report. A market strategist analyzes the reports findings below.
Analysts estimates had corn and soybean ending stocks increasing. Brian Grossman, market strategist with Zaner Group, says analyst estimates were partially accurate.
“The corn ending stock number did go up 55 million bushels, now at 2.182 billion bushels. It was awfully close to what the trade estimates were,” Grossman said. “Soybeans took a different approach, losing five million of our ending stock – a little higher on crush demand, a little lower on residual.”
Grossman reports South America also saw great movement in ending stocks. Argentina’s corn ending stocks decreased three million metric tonnes, coming in at 33 million metric tonnes. Brazil’s corn ending stock also decreased. Soybean stocks dropped to 92 million metric tonnes, losing two-and-a-half million metric tonnes. Grossman says USDA once again “pulled the Band-aid off” Argentina’s soybean ending stocks.
“Last month, we saw a pretty big reduction. Again, another large reduction – losing seven million metric tonnes for Argentina production, now at 40 million metric tonnes. Brazil going up to a 115, above last months by two million metric tonnes and on par with the average trade estimate,” Grossman said.
Grossman says it is important to note – the United States still has a lot of grain on hand.
“A 55 million bushel ending stock here means we’re starting next year with a rather large supply. For corn, it’s great to see we’re down from last year, but still a lot of corn,” Grossman said.