U.S. corn and soybean ending stocks are getting tighter as the Department of Agriculture increased exports in Tuesday’s World Agricultural Supply and Demand Estimates report.
The tighter ending stocks are also leading to higher anticipated prices as producers begin preparations for the spring planting season.
USDA increased corn exports to 2.6 billion bushels, up 50 million bushels from January’s estimate of 2.55 billion bushels.
University of Missouri Extension Economist Ben Brown said he expected corn ending stocks to drop due to an increase in exports.
“We only saw a 50 million bushel increase in U.S. exports because often, it's not a one for one substitution. When we see big purchases by one country, a lot of times that’s offset to some degree by other buyers,” Brown told Agri-Pulse.
The export increase was largely driven by China increasing their buying of U.S. grain, but non-Chinese buyers stepped away from importing as much corn, as was the case of South Korea and Japan, Brown said.
U.S. corn ending stocks are estimated at 1.502 billion bushels compared to 1.552 billion bushels in January and a trade estimate of 1.39 billion bushels. The average farm price per bushel rose from $4.20 last month to $4.30 this month.
Soybean exports for the 2021 marketing year increased from 2.23 billion bushels in January to 2.25 billion bushels this month. Soybean ending stocks are at 120 million bushels, down from 140 million bushels last month. The average trade guess was 123 million bushels.
Mac Marshall, vice president of market intelligence at the United Soybean Board and U.S. Soybean Export Council, expected the increase in soybean exports to drive down ending stocks.
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“Not too surprised that USDA took up the expected export projection for the year which contributed to the downward revision of ending stocks,” he told Agri-Pulse. But he was a bit surprised USDA did not bring down South American production.
“For the last couple of months, dryness in Argentina has prompted USDA and local observers in Argentina to bring down the estimate of Argentine production. That remained unchanged in February,” Marshall said.
Argentina's soybean production is estimated at 48 million metric tons (mmt) and Brazil's soybean production is estimated at 133 mmt. Marshal noted he’ll be watching for those adjustments in next month’s report along with domestic use.
Government officials maintained wheat ending stocks at 836 million bushels from January; traders expected a drop to 834 million bushels. USDA raised the average farm price per bushel from $4.85 last month to $5.00 in February.
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