March WASDE-US corn ending stocks reduced on strong export sales pace


WASDE Mch 2018

Good afternoon,


The March WASDE had a lot of moving parts to it on the world balance sheet as South American summer crop sizes have become better known.  As expected, reductions to Argentina’s crop sizes due to the ongoing severe drought in the country continued to be reflected in the world numbers as corn production in the country was reduced by 3 mmt to 36mmt and soybeans were reduced by 7mmt to 47 mmt.  Both of these numbers are perhaps on the high side of what the market is expecting out of these crops at this point and I would anticipate the USDA still has some revisions in the month to come.

Brazil soybean expectations were raised by 1 mmt which helped to keep the world balance sheet from falling too much but total reductions of just under 4mmt on the world ending stocks number were realized at 94.4 mmt.


World Soybean Supply and Use
Crop Year 2008/2009 2009/2010 2010/2011 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016 2016/2017 2017/2018
Beginning Stocks 52,668 42,870 60,690 70,565 53,232 55,213 61,587 77,518 78,284 96,651
Production 212,072 260,760 264,400 240,440 268,463 282,751 320,013 313,709 351,315 340,857
Imports 77,903 87,502 89,786 94,552 97,192 113,067 124,362 133,325 144,281 151,270
Exports 77,212 91,474 91,706 92,186 100,797 112,777 126,129 132,463 147,455 150,603
Crush 194,626 210,220 221,978 229,903 231,511 242,919 264,350 274,930 288,498 300,857
Domestic Consumption 222,561 238,968 252,605 260,139 262,877 276,667 302,315 314,345 329,774 343,778
Ending Stocks 42,870 60,690 70,565 53,232 55,213 61,587 77,518 77,744 96,651 94,397



Looking at the US balance sheets.  US wheat ending stocks were raised by 25 mmt reflecting the US slow export sales pace and it’s relative noncompetitive position after the recent rally.  FOB prices within striking distance of Russian values back in January but have moved back to more than 30 bucks in premium per tonne higher than current Russian values.  The book keeping measures in the current WASDE help to reflect total export commitments which were lower than the Feb USDA export expectations.


Corn ending stocks were reduced for a second month and for some reason most of the market was looking for a flat to higher number.  Exports sales have been meteoric as of late and the additions of 175 mbu to export usage accurately reflects that.  Ethanol consumption had been outpacing the USDA’s Feb number by roughly 2% so an additional 50 mbu or roughly 1% reflects the ideas that the current low price for inputs will keep the corn grind strong.


Soybean ending stocks rose to 555 mbu which I think surprised the market if taken at face value.  The narrative has been expecting some demand shifting from SA to US for soybean crush and exports, but with the pace of soybean exports through the end of Feb (ie not including the huge total this morning) it argued for a much larger ending stocks number that wasn’t fully reflected in the balance sheet thru February.  The rise in ending stocks is accounting for a pickup in crush that is not fully realized but US export sales thru this morning’s number still reflect a commitments pace that is 8% behind last year with Brazil having an adequate crop coming to market which is almost as large as last year’s crop it will keep sales pickups incremental thru the rest of the marketing year in my opinion.