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Market Analysis

The USDA slashed Argentina soybeans & corn crops as 2023’s drought continues to impact their outputs. However, the World Board didn’t change their world ending stocks dramatically as they moderated both crops demand levels. This prompted a small drop in soybean stocks while corn’s world carryover rose modestly. Without big carryover changes to Argentina’s 15-20% crop changes, the markets moderate their initial strength by the CBOT closes.

Brazil’s soybeans crop outlook was left unchanged this month, but USDA cut Argentine crop by 8 mmt to 33 mmt which was also below the trade’s 36.65 mmt average estimate. To reach this low level, their harvested area was sliced 400,000 hectares and this month’s yield by dropped by 17% to 2.13 m ton/htr, slightly below 2017/18’s previous yield. Lower demand in Argentina (3.5 mmt) and China (2 mmt) was the reason the USDA’s monthly stocks only declined by 2 mmt to 100 mmt. Interestingly, the US 22/23 stocks declined by 15 million bu to 210 with the USDA upping this year’s exports by 25 million, but slicing the US crush by 10 million. Reducing the US processing level was a bit of a surprise with the US domestic demand for renewable diesel on the rise the next 18 months.

Argentina’s current drought also cut their corn output by 7 mmt to 40 mmt & was 3.4 mmt below the trade’s estimate. Brazil’s corn crop was left unchanged at 125 mmt. Argen– tine’s smaller crop reduces their exports by 7 mmt. This prompted B Aries to announce that exports could be reschedule by up to 180 days because of smaller supplies. These smaller exports along with smaller US exports reduced the world’s demand & increased stocks by 1.2 mmt to 296.5 mmt. The US ending stocks were upped 75 million because of current slow overseas sales to 1.34 billion with no change in feed or ethanol demand.

With no change in the US wheat’s balance sheet, the trade looked to higher world crops in Australia (1 mmt), India (1 mmt) and Kazakhstan (2.4 mmt) leaving wheat defensive despite stocks being 2 mmt lower to 267.2 mmt.

What’s Ahead:

The USDA’s latest monthly update again reduced the world’s corn and soybeans supplies because of smaller Argentine crops. Buenos Aries declaring their corn exports can be rescheduled up to 180 days and the upcoming Black Sea trade deal deadline on March 18 adds further uncertainty.

Hold your oldcrop corn & soybean sales at 80% and have 10% of your new-crop sales completed at this time.

More By This Author:

Pre-March US/World S&D Reports
In Grains South America’s Weather Is The Focus
Pre-February US/World S&D Reports And S. American crop