Trade turns focus to weather, planting

MINNEAPOLIS — The April World Agricultural Supply and Demand Estimates report was more of an afterthought released eight days after the highly anticipated Prospective Plantings and Quarterly Grain Stocks reports.

With the trade’s focus on weather and the upcoming planting season, Ami Heesch, CHS Hedging market analyst, gave a quick rundown of the U.S. Department of Agriculture’s supply and demand report in a Minneapolis Grain Exchange-hosted teleconference April 8.

The USDA has taken a wait-and-see approach regarding Ukraine’s agriculture production since Russia’s attack.

Heesch: I thought we might have seen a change in Ukraine, but it might be just a little bit too early yet, maybe we won’t see that until the May report to see how much is still not getting shipped out of there.

Looking at the world wheat picture, we had a drop of 3 million tons in world ending stocks. There was a slight increase in Argentina, a slight decrease in Europe, and the rest were unchanged.

Were there changes of note on the domestic wheat side?

Heesch: There was a 10 million bushels drop in soft red winter wheat domestic use and a 5 million bushels drop in exports, raising our carryout from 97 million to 112 million bushels.

For the all-wheat category, 2021-2022 ending stocks increased from 653 million bushels last month to 678 million in this report.

The 2020-2021 U.S. soybean balance sheet was unchanged, but there was a 25 million bushel decrease in the 2021-2022 carryout. What led to the decrease and what is the status of global stocks?

Heesch: That came from a 25 million bushel increase in exports and some slight changes in feed and residual.

There was a very slight decrease in global soybean ending stocks for 2021-2022. I think people were mostly looking at South America, but Argentina production was left unchanged from last month at 43.5 million metric tons.

Brazil soybean production was lowered another 2 million to 125 million metric tons. The trade may have been looking at a little bit lower number than that.

The corn carryout of 1.235 billion bushels and 1.44 billion for 2020-2021 and 2021-2022, respectively, were unchanged, but numbers did move.

Heesch: Feed and residual for 2021-2022 was lowered by 25 million bushels and that was offset by a 25 million bushels increase for ethanol.

There were some increases in world corn production. Brazil was up 2 million tons to 116 million. Europe production was up from 69.8 million tons to 70.5 million, and Southeast Asia was up a little bit, increasing total world ending stocks by 4.5 million metric tons for 2021-2022.