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USDA lowers soybean export stock forecast
Market Analysis
By Karl Setzer
 Revisions to the domestic corn balance sheets in the monthly World Agricultural Supply and Demand Estimates were as expected. Corn demand was increased by 25 million bu each for feed and residual and ethanol manufacturing. This trimmed corn ending stocks for the 2023/24 marketing year to 2.122 billion bu, a stocks to use of 14.5 percent. This remains above the level where rationing would be needed. The USDA trimmed its average cash price projection on corn to $4.70 given the lack of bullish sentiment in the complex.
Soybean balance sheet updates caught trade by surprise this month. The USDA reduced its soybean import forecast by 5 mbu, but also cut its seed and residual by 10 mbu and lowered its export forecast by 20 mbu for an increase in projected ending stocks of 25 mbu. This put the carryout estimate at 340 mbu, which was above trade guesses. Trade was expecting to see an increase in soybean ending stocks, but later in the marketing year. The increase in soybean inventory was enough to elevate the stocks to use on soybeans to 8.3 percent and greatly diminishes the need for rationing. As a result, the average cash value on soybeans declined 10 cents to $12.55 per bushel.
For domestic wheat balance sheets, we had a 5 mbu reduction to imports but also a 30 mbu reduction to projected feed and residual usage. This took wheat ending stocks to 698 mbu, a month-to-month increase of 25 mbu. Stocks to use on wheat remains lofty at 38.2 percent. The cash value of U.S. wheat was trimmed 5 cents for a projection of $7.10 per bushel.
Only minimal changes took place to the global side of the monthly release. The USDA trimmed the Argentine corn crop to 55 million metric tons, down 1 mmt from March. The Brazilian corn crop was left at 124 mmt while a decline of 1.4 mmt was expected. The South African corn crop was reduced to 14 mmt this month from 15.5 mmt last month.
No changes were made to South American soybean production this month. This left the Brazil crop at 155 mmt and the Argentine crop at 50 mmt. Trade had been expecting a slight increase to Argentine production and a similar decrease to Brazil’s crop.
World corn carryout is now forecast at 318.28 mmt compared to 319.63 mmt last month. The world soybean carryout is estimated at 114.22 mmt, just under March’s 114.27 mmt. The global wheat carryout was also little changed, going from 258.83 in March to 258.27 mmt this month.
Several alterations were made to red meat balance sheets this month. U.S. beef production for 2024 is now estimated at 26.46 billion pounds, an increase of 130 million pounds from March. This is still a 510-million-pound reduction from 2023. Pork production for 2024 is now projected at 28.09 billion pounds, up 180 million pounds from a month ago and a large 790-million-pound increase on the year.
Beef exports for 2024 are now estimated at 2.8 billion pounds, up 20 million from March, but down 233 million pounds from 2023. Pork exports are forecast at 7.34 billion pounds, 210 million more than last month, and a large 522-million-pound increase on the year. Beef imports are now forecast at 4.175 billion pounds, unchanged on the month but up 448 million pounds on the year.
The average steer value is now reported at $185.01 per hundredweight, up $2.51 from March’s estimate, and a large $9.47 increase on the year. The average hog value is $62.99 per cwt, up $2.24 on the month and $4.40 on the year.
Prior to this data being released, the Brazilian firm CONAB, that country’s version of the USDA, released its own balance sheet updates. CONAB is now projecting the Brazilian soybean crop at 146.52 mmt, down slightly from the 146.86 mmt estimate in March. Brazil’s soybean exports are predicted at 92.26 mmt for 2023/24, just under the 92.33 mmt last month. Soybean carryout in Brazil is now forecast at 2.49 mmt compared to 2.75 mmt a month ago.
On corn, CONAB is predicting a Brazilian crop of 110.96 mmt compared to the March estimate for 112.75 mmt. Corn exports were trimmed 1 mmt to 31 mmt for the 2023/24 marketing year. Corn ending stocks in Brazil are projected at 5.59 mmt, down from 6.25 mmt in March. CONAB did increase the Brazilian wheat crop to 9.73 mmt from last month’s 9.59 mmt estimate.
The main difference between the CONAB and other crop estimates, including the USDA, is from acreage. Firms that are using more modern technology to collect acreage data are projecting larger crops.
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