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Market Analysis

Last week’s 2022 US planting intentions provided some surprises when the survey revealed higher corn plantings, unchanged in soybeans seedings & even higher winter wheat plantings than the trade expected. The USDA won’t utilize these planting levels until their May 12 first 2023/24 US supply/demand update. Their importance however justifies 2023/24 balance sheet creations utilizing Ag Forum trends. The latest quarterly stocks, S America’s crop prospects, the Black Sea conflict’s impact on world trade & US spring planting weather will all be factors influencing the upcoming April 10 US old-crop balance sheets.

Soybean’s March 1 stocks were 57 million bu below the trade’s estimate. February’s 25 million stronger US crush & Census export data helped explain part of this difference. Given Argentina’s poor crop & recent US hog & poultry reports, the current US export & crush trends seem on target. However, the current 154 million residual disappearances suggest the US crop could be overestimated by 30-35 million bu or possibly more. This suggests beans' residual demand should be 50 million bu to reflect a 2023/34 ending stocks below 180 million. Will the USDA do this change now or wait until later? A smaller carryover tightens up the soybeans 2023/24 balance sheet without any change in plantings.

Corn’s quarterly stocks were also 70 million below expectations. A higher Feb US export pace (+29 million) than inspection data & China’s hefty 4 mmt of purchases should keep exports unchanged. Feedlot cattle numbers are down, but hog & poultry figures are near last year. With limited alternate feedstocks (wheat & small grains), corn remains the # 1 feed source. With higher spring & summer driving, ethanol should have a strong 2^nd half-corn demand. Corn’s 92 million seedlings are sizable, but 1.3 million of these added acres are in the N Plains under snow keeping us nervous.

Wheat’s higher quarterly stocks suggest 10-15 miln lower feed usage. Slow exports also suggest a 15 million rise in stocks to 598 million. US wheat seedings are large, but 2023’s Plains drought could cut harvested area sharply.

What’s Ahead:

Higher corn and wheat planting intentions seemed to counter soybeans and corn’s lower-than-expected March quarterly stocks. However, current ground conditions aren’t favorable in either N or SW Plains for spring crops to be planted (snow) or winter crops to be harvested (drought). How S America’s crops finish is also important. Hold corn & soybeans sales at 80% & new-crop marketings at 10-15%.

More By This Author:

US Planting Intentions/Q-STKS
Reaction To USDA's March 2023 Prospective Plantings And Grain Stocks
Strong Ag Prices Could Return Total US Plantings To Recent Levels