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Agricultural News


Allendale's Rich Nelson says March WASDE Neutral for Corn and soybeans, Slightly bearish for Wheat

Wed, 09 Mar 2022 15:26:05 CST

Allendale's Rich Nelson says March WASDE Neutral for Corn and soybeans, Slightly bearish for Wheat In its March global and domestic supply and demand report, USDA factored in the war in Ukraine by slashing exports from the country, even as Ukraine implemented its own ban on exports on Wednesday.

Just hours before USDA released its World Agricultural Supply and Demand Estimates (WASDE) report, Ukraine announced an export ban on wheat, corn, sunflower oil, oats, rye, barley, sugar and cattle.

In a note, USDA stated "Russia's recent military action in Ukraine significantly increased the uncertainty of agricultural supply and demand conditions in the region and globally. The March WASDE represents an initial assessment of the short-term impacts as a result of this action."

With that, USDA lowered Ukraine's wheat exports by 4 million metric tons (mmt) to 20 mmt. Russia's wheat exports are reduced 3 mmt to 32 mmt "as vessel transportation is expected be constrained by the conflict and the imposition of economic sanctions."

USDA also lowered Ukraine's wheat exports 5 mmt to 27.5 mmt.

Sizeable cuts to Brazil and Argentina soybean production for the 2021-22 season as drought reduced the size of the crop. Brazilian growers are now forecast to harvest 127 mmt, down from USDA's previous forecast of 134 mmt. Out of Argentina, USDA expects production of 43.5 mmt, 1.5 mmt lower than it forecast in February.

USDA left Brazilian corn production unchanged at 114 mmt, while lowering Argentina's expected output for the 2021-22 marketing year by 1 mmt to 53 mmt.

Farm Director, KC Sheperd spoke with Allendale's Rich Nelson about the latest Results, and Nelson said we may see further declines for wheat exports in future months, " In addition, we may see the US new crop, which starts on June 1, to pick up a little better business. Another factor, the trade has clear concerns about the US hard red production given dry conditions forecast for April in the Plains"

Nelson says for soybeans the focus was NOT on China, "However, we will point out they did drop the old crop import picture for them by a hefty 3 mt to now 94.0. That is the lowest import total in three years."

To hear KC's complete conversation with Rich Nelson over this month's WASDE, click or tap below.

Corn:

USDA lowered old crop ending stocks from 1.540 billion to 1.440. The trade estimate was under the 1.479 trade expectation. A 25 million bushel increase was noted for corn for ethanol which is reasonable. Marketing year to date ethanol production is -0.1% from 2018/19. USDA's February goal was -1.0% for the whole year. Their new number is now -0.5% from 2018/19. We expect another 25 million bushel increase in the coming months. Old crop US corn exports were raised by 75 million bushels on this report, 1.9 million tonnes. This partially offset the 6 million tonne decline they estimated for Ukraine's old crop exports. Of interest, USDA did not raise exports in any other countries. USDA raised US corn exports on the expectation of future sales. They can't raise it any more in the near term as we have yet to see any sustained interest in US product yet. To read more Premium Content from Allendale, click here:

Soybeans:
US old crop soybean stocks were lowered from 325 million bushels to 285. That was near the 278 trade expectation. The only real change was a 50 million bushel increase for US old crop exports, +1.1 million tonnes. Different than with corn, we have several weeks of confirmed new sales to justify this move. For South American changes USDA was relatively conservative. Argentina was lowered by 1.5 mt to 43.5. The trade would expect another 2 mt out of that in the future. Brazil was lowered from 134 to 127. On the export side, they lowered Argentina by 1 mt, Brazil by 5 and Paraguay by 0.5. As you know, USDA is assuming most of these export deficits will impact the US new crop picture more than old.

Wheat:

USDA raised US wheat ending stocks on this report, from 648 million bushels to 653. The trade expectation was the see some type of export increase and for stocks to drop to 628. USDA did not give us any additional export business for this old crop that ends on May 31. In fact, they lowered it by 10 million bushels, 0.3 million tonnes. USDA chose to drop Ukraine's wheat exports that end on June 30 by 4 million tonnes. Russian exports were lowered by 3. There were no increases lined up for the first region that would benefit, the EU. Australia was raised by 2 mt and India by 1.5. To read more Premium Content from Allendale, click here:

You can also access the full reports here:

-- Crop Production:

-- World Agricultural Supply and Demand Estimates (WASDE):


   
   

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