Corn export demand remains strong

KANSAS CITY, Mo. — A unexpected reduction in corn ending stocks was among the few surprises in the U.S. Department of Agriculture’s April supply and demand estimates report.

This and other crop balance sheet issues were reviewed by Arlan Suderman, StoneX chief commodities economist, in a post-report webinar.

USDA’s new report gave corn and soybean markets some good news, right?

Suderman: The biggest number here was dropping corn ending stocks by 75 million bushels with a 100 million bushel increase in exports and a 25 million bushel decrease in feed usage.

It brings corn ending stocks to 1.465 billion bushels. I’m still another 60 million bushels lower than that, but we’ll see how this plays out. Corn saw good confirmation of strong export demand.

When we look at export shipment inspections for corn, even with the increase in the export target, year-to-date inspections still exceed the seasonal pace needed to hit USDA’s target by 159 million bushels.

When we look at ethanol, we’re still exceeding the pace. Now, we’re seeing a seasonal decline from maintenance on our plants, and we expected that to trend higher once again in another week or two.

What did the report tell us about soybeans?

Suderman: Something that may seem insignificant was a 5 million bushel drop in soybean ending stocks. Three hundred and seventy-five million bushels in ending stocks is still plenty of soybeans.

USDA increased crush by 10 million bushels while increasing imports by 5 million. So, it was a pretty small changes.

Why is that significant? That is significant because if you look at what’s happening in the crush industry right now, we’re seeing a significant drop in crush activity because of a lack of clarity on Renewable Fuel Standard.

The renewable biodiesel mandate is sitting currently at 3.35 billion gallons and what we’re told is the industry has recommended to the Environmental Protection Agency that be raised to 5.25 billion gallons.

We don’t expect EPA to go that high because when they model things out, even though it’s not policy, they assume only U.S. domestic feedstocks and they don’t believe there’s enough feedstock in United States to do something that high.

So, we’re looking for something closer to 4.25 billion bushels, maybe as high as 4.5 billion this year, and ratcheting it up a little bit each year after that.

Is USDA saying they believe that those updated numbers from the EPA are going to be good numbers and they’re going to come out soon in the weeks ahead? That’s the way the market is interpreting it. The soybean crush estimates suggest EPA will likely support the biofuels going forward.

Chinese demand is flattening. South American soybeans are favored due to currency exchange rates making them cheaper.

Wheat continues to be on the bearish side with larger stocks, correct?

Suderman: Wheat ending stocks rose by 27 million bushels to 846 million by cutting exports by another 15 million while increasing imports by 10 million bushels.

We also a little bit of an increased in wheat imports. The market really wasn’t anticipating that. It was largely hard red winter wheat exports that are problems. So, we increased the cushion a little bit.

That 846 million bushels ending stocks is quite a cushion against weather problems as we finish off this growing season. It doesn’t eliminate the need to ration demand with higher prices should a more significant weather problem here or in Russia or somewhere else develop, but it eases those concerns somewhat.

What will the market be watching going forward?

Suderman: Weather remains a factor for corn, soybeans and wheat. Tariff and shipping fee risk continue to remain ahead for these markets and, so far, the grains are holding impressively.

The weather risks are elevated for the 2025 Midwest growing season. Headline risks remain high with this administration and that’s likely going to continue to be the case for some time.