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May 13, 2020 | FBN Insights | Kevin McNew

Markets Quiet After Uneventful USDA Report

Report was generally uneventful with bearish global stocks for wheat

USDA Outlook Split for Soybeans 

  • Old-crop stocks were increased 100 million bushels to 580 million on lower exports compared with the 497 million expected by the trade.
  • New-crop carryout was pegged at 405 million bushels compared to the average estimate of 440 million.
  • South America’s crop was projected lower with Brazil down 500,000 tonnes and Argentina down 1 million.
  • China’s imports were raised 3 million tonnes to 92 million for 2019/20 with 2020/21 imports expected at 96 million tonnes.

FBN’s Take On What It Means: The large increase in old crop carryout comes as the USDA accounts for lagging exports. However, the agency appears to be more confident of demand in the coming season, leaving their crush and export forecasts for 2020/21 unchanged from the February Outlook report. Overall, the tighter balance sheet for 2020/21 leaves much less room for production problems during the coming growing season.

USDA Report Has Few Surprises for Wheat 

  • Winter wheat output was in line with trade ideas at 1,255 million bushels.
  • HRW production was forecast at 733 million bushels, a bit less than expectations at 754 million.
  • The SRW crop forecast at 297 million bushels was above the average expectation of 271 million.
  • Projected 2020/21 world ending stocks increased 5% to a record 310 million tonnes with China accounting for 52% of the total.

FBN’s Take On What It Means: USDA’s report was generally uneventful with bearish global stocks as the feature. However, this will depend on the outcome of Northern Hemisphere crops which still have some issues. Focus will likely return to the weather, and  the dryness in northern Europe, southeast Ukraine, and southern Russia is important. Recent forecasts are not optimistic for much rain in these areas, at least for the next week.


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