Weakening corn and soybean demand revealed in Friday’s USDA’s World Agricultural Supply and Demand Estimates could keep a lid on grain and oilseed prices.
“Corn demand is a bigger concern than dryness,” Arlan Suderman, chief commodities economist at StoneX, told Agri-Pulse, as many corn regions have reports of low moisture.
USDA lowered corn exports by 50 million bushels based on lower shipments through the month of April and expectations of competition from Brazil in the coming months. Suderman said China has already canceled some of the sales on the books and could shift its purchases in the next two to three weeks to South America.
Suderman said USDA may still be overestimating overseas demand for U.S. corn; he said export expectations are possibly 300 million bushels too high. China is also anticipated to feed more wheat, which would also dampen U.S. corn exports to China, he said.
USDA estimated higher corn production and exports for Ukraine and higher corn exports for Brazil and South Africa while projecting lower corn production in Argentina.
USDA kept the season-average corn price unchanged for producers at $4.80 per bushel.
USDA will release its acreage report on June 30, and Suderman anticipates acreage planted to corn in that report is likely to remain near USDA’s March estimate of 92 million acres. He said he expects 350,000 to 450,000 acres of prevented plant land, but the rapid planting pace for most of the country will help offset those minimal losses.
USDA increased U.S. soybean supply and use projects for 2023/24. “Higher beginning stocks reflect reduced exports for 2022/23, down 15 million bushels to 2 billion based on lower-than-expected shipments in May and competition from South America,” the WASDE said. “Soybean ending stocks are projected at 350 million bushels, up 15 million.”
Suderman said soybean exports are vulnerable to additional cuts late in the season.
“USDA is too high on its export target, but too low on its crush target,” Suderman said. He expects ending stocks to increase 40 to 50 million bushels, which is “not too overly burdensome.”
In its June 30 acreage report, Suderman said USDA could increase soybean acres by 1 million depending on how late the wheat harvest progresses in some areas. Excessive rains in the southeast Plains have slowed progress. In March, USDA estimated soybean acreage at 86.7 million acres.
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The average price for soybeans is estimated at $12.10, unchanged from last month, but down from the 2021/22 average of $13.30 and last year’s estimate of $14.20.
On the global soybean outlook, USDA projected higher beginning stocks for the United States and Brazil partially offset by lower stocks for Argentina. USDA revised production 1 million tons lower for Brazil, Argentina down 2 million.
USDA projected larger wheat supplies this month and unchanged domestic use and exports, resulting in higher stocks. All wheat production is projected at 1.665 billion bushels, up 6 million from last month.
“The global wheat outlook for 2023/24 is for larger supplies, higher consumption, increased trade and larger stocks,” USDA said. Larger production for Russia, India, EU and Ukraine will boost total supplies. “Ukraine is increased 1 million tons to 17.5 million on favorable weather conditions in southern Ukraine, but production remains below last year on reduced harvested area.”
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