A lack of change in the soybean report has surprised the market and sent beans to double digit losses, reversing early gains.
USDA released its monthly supply and demand report with few surprises. The March report is usually a quiet report while the big news is expected to come from the planting intentions and quarterly stocks report at the end of March. However, the quiet part might be the big news in this report with soybean demand remaining unchanged along with the corresponding carryout. Traders were looking for an adjustment to both crush and export numbers, with a possible increase in imports.
World soybean stocks increased to 60.21 million metric tons, above trade estimates adding downward pressure to prices. Production in Argentina was lowered 1.5 MMT to 51.5 MMT, while Brazilian numbers were unchanged. With recent developments, the trade had some expectation that both countries would lower production and that the net number would be smaller than these numbers.
Wheat markets were expecting the increase in domestic carryout, but the increase in world ending stocks caught the market a little off guard. World stocks were increased by 1.59 MMT while the average trade estimate was for little adjustment. When the 25 million bushel increase in domestic carryout is combined with an unexpected increase in world stocks, wheat markets moved lower as traders digested the numbers.
Corn markets were the recipient of what little good news came from the USDA this morning. Carryout stayed at 632 million bushels after the export estimate was dropped by 75 million bushels because feed use was increased by another 100 million bushels prior to the March 1 quarterly stocks report at the end of the month where most analysts had assumed the adjustment might come. Included in the math was an increase of 25 million bushels in corn imports to balance the books. Corn prices were the only positive numbers on the board after the good news domestically was combined with a little lower than expected world ending stocks number at 117..48 MMT.
USDA did not adjust ethanol numbers, preferring to wait until after the quarterly stocks report and another few weeks of production to determine whether continued rationing has occurred in the biofuels market.
Download the full USDA report below.