USDA March Crop & Supply & Demand Updates

Market Analysis

The USDA resumed to its longer-term trend of minimal changes in their US and World supply & demand levels during March as many in the trade were expecting. Under the expanding Coronavirus world health issue and China’s modest start to its Phrase 1 trade commitments, the World Board left the 3 major US crop ending stocks unchanged and only made some very modest adjustments in their World ending supplies this month.

Despite the recent strength in the US domestic crush (3 records in last 4 months), the USDA decided to leave this demand unchanged. They also left bean exports the same after last month’s increase. However, the USDA upped both Brazil’s & Argentina’s crop sizes by 1 mmt to 126 and 54 mmt. Yields were increased, but they sliced 500,000 hectares from Argentina’s area possibly on the current conflict over higher export taxes in that country. These increases upped soybean world stocks to 102.4 mmt, but this level remains 9 mmt below this year’s beginning stocks. No change was made in China’s 2019/20 imports at 86 mmt.

In corn, the World Board kept its US 19/20 ethanol usage unchanged this month, but reports of Chinese DDGs purchases and interest in ethanol suggest this domestic demand could be on the rise. US exports were also stable this month, but Chinese interest in this feed grain is needed to hit the USDA’s outlook. The upcoming March 31 quarterly stocks is the barometer on corn’s late-season quality issues and its 2019/20 feeding level. Brazil’s large safrina crop and dryness in Argentina keeps S America’s corn output vulnerable for losses over the next 6-8 weeks after the USDA left these crops unchanged at 101 and 50 mmt.

Similar to corn and beans, the USDA left wheat’s US balance sheet unchanged. Export sales are ahead of last year, but weekly shipments need to average 23 million bushels to hit 1 billion. The value of the US dollar will be the factor if wheat hits its goal. 

What’s Ahead:

US & S America weather along with the world’s ability to slow & control COVID-19 will be the main market factors going forward. Hopefully, a better understanding of this coronavirus will reduce the emotions & reduce its impact on people and the markets. Still looking to utilize May strength to advance corn & soybean sales 20% at $3.88-92 & $8.98-$9.10 and 15% of your new-crop at $3.97-$4.00 & $9.30.