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December 05, 2019 | FBN Insights | Kevin McNew

Reuters December WASDE Poll: Neutral Corn/Soy

Corn, soy, wheat ending stocks unchanged

December WASDE Poll: Corn, Soy, Wheat Ending Stocks Unchanged 

On Wednesday, Dec. 4 Reuters released their estimates for the USDA’s December WASDE report at 11:00 CST on Tuesday, Dec.10 

Corn: The average Reuters estimate for 2019/20 ending corn stocks is 1.919 billion bushels (BBU), up slightly from the USDA’s reported 1.910 BBU in November.

FBN’s thoughts: Reuters poll looks like the government could be reducing 2019/20 exports demand as recent volume has been lackluster.  FBN will be particularly focused on how the USDA treats yield and harvested acres.  

Soybeans: The average Reuters estimate for 2019/20 ending soybean stocks is 476 million bushels (MBU) up slightly from the USDA’s reported 475 MBU in November.

FBN’s thoughts: Reuters poll looks like there could be minor adjustments in the demand side. FBN will be focused on how the government treats the yield and harvested acres.

Wheat: The average Reuters estimate for 2019/20 ending all-wheat stocks is 1.010 billion bushels (BBU) down slightly from the USDA’s reported 1.014 BBU in November.

FBN’s thoughts: Reuters poll looks like there could be minor increases in the US exports.  FBN will be focused on HRW and white wheat exports along with how the USDA treats the Russian, Australian and Ukraine export figures.  

FBN’s Take On What It Means : We believe that the December WASDE report is generally a neutral report for corn and soybeans.  Given how slow the corn and soybean harvest is, at FBN we are focused on how the government treats corn and soybean yields and harvested acres.  We believe that the Reuters corn and soybean ending stocks estimates appear as if the government will wait until the January WASDE to adjust the supply side of the corn and soybean balance sheets.           

Brazil To Plant Largest Corn Area On Record; Production Steady/Firm 

According to a Reuters poll, Brazilian farmers are expected to plant more than 18 million hectares (MH) of corn in the 2019/20 season, a 3.5%YoY increase. 

If realized this would be the largest planted area on record.

Initial estimates from the Reuters poll have Brazilian corn production at 101 million tonnes (MMT).  

IEG Vantage is estimating Brazilian corn production at 103 MMT.  This would be a record production.     

Brazil harvests 2 corn crops each year.    

Brazil's second corn crop, Safrinha, is cultivated after soybeans are harvested and is the largest of the 2 crops.  

Domestic Brazilian corn demand has been strong and has been supported by a growing livestock numbers and rising ethanol production.  

FBN’s Take On What It Means:  We believe that the projected increase in Brazilian corn acres is not a surprise and can represent a threat to the US corn export program and the US farmer.  While there is a long time until the Brazilian corn crops are harvested, we believe that a strong US dollar combined with what appears could be accommodating Brazilian corn supplies has the ability to slow US corn exports which can be a negative for US corn futures.                                        

                   

The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

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