USDA shocked the soybean market with lower old and new crop ending stocks figures in their latest supply and demand report. Old crop carryout was lowered to 400 million bushels, but the new crop estimate was 305 million bushels which was 100 million bushels below the trade guess. Doug Werling with Bower Trading says USDA got to this number by substantially increasing export and crush demand.
USDA also lowered Argentina soybean production to 56.5 mmt and Brazil to 99 mmt. So if the U.S. has any problems during the growing season or August ends up being dry as forecasted, the market could have more upside. He says the normal weather rally for soybeans could push prices well over $11.
Corn ending stocks were lowered slightly to 1.8 billion bushels, but the new crop stocks came in at 2.153 billion due to a 14.43 billion bushel production number. Werling says while this was below estimates, its still not bullish. USDA did lower corn production in Argentina 1 mmt and Brazil was lowered by 3mmt.
The wheat numbers were also bearish with all wheat production at 1. 99 billion bushels. Old crop ending stocks were estimated at 978 million bushels and new crop stocks about the 1 billion mark.
Werling says world carryout was lowered for soybeans and corn in both old and new crop marketing years, but USDA raised global numbers for wheat.
