USDA keeps domestic endings stocks as is

CHARLOTTE, Mich. — Despite strong demand pace, an expected increase in corn exports wasn’t reflected in the U.S. Department of Agriculture’s supply and demand estimates report.

The report that included little changes domestically and higher global corn and wheat stocks was dissected by Consus Ag Consulting co-partners Angie and Karl Setzer on their live podcast on X.

Let’s start with the U.S. balance sheets. How did the numbers compare with the trade’s pre-report expectations?

Angie Setzer: Wheat ending stocks came in a little higher than what was expected at 938 million bushels. Traders were expecting it to come in a little bit closer to 923 million bushels. The USDA left wheat exports unchanged and lowered feed use a little bit.

I still think there’s room for the USDA to come in and adjust exports higher, which will help to absorb maybe 15 million of that, but when it comes down to it the wheat number is what the wheat number is.

We’ll be paying attention to new crop production as a whole. Wheat, though, is really getting pummeled, mostly because the world numbers coming in much higher than anticipated and a lot of that sitting in the hands of India producers.

India’s domestic usage was reduced by about 5 million metric tons and all of that was put basically into their bottom line.

On the corn side, carryout came in unchanged at 2.127 billon bushels. The pre-report trade average was 2.128 billion.

Soybean carryout was also unchanged at 350 million bushels. The trade average was 349 million.

What were among the highlights on the global balance sheets?

Karl Setzer: On the global side, world wheat ending stocks came in 283.12 million metric tons, about 6 million metric tons higher than the trade average going into the report.

World corn ending stocks of 294.81 million metric tons, about 1.6 million metric tons more than expected and 2 million metric tons more than we had in March.

World soybean ending stocks were 124.79 million metric tons and 125.51 million was expected. So, we came in a little bit light on our world soybean carryout. There’s just not a lot going on there at all.

Looking at global production numbers, the South African crop bumped up to 17.3 million metric tons, up 800,000 tons; Brazil corn at 132 million metric tons — not too much for changes on the production side.

Angie Setzer: The European Union and Australia’s wheat carryouts were all bumped up a little bit. That’s probably whey we’re seeing wheat sell-off here.

Those headline numbers are going to show you that world wheat ending stocks came in higher than anticipated.

Anything thing either of you would like to add?

Karl Setzer: This is coming out of the corn comments here in the report, and bears noting, “Disappearance during the first half of the marketing year has totaled 9.6 billion bushels, up over 1 billion from the same period year ago.”

Folks, don’t get too hung up on these corn carryout numbers. Look at that demand. That demand is there, and that’s why the USDA bumped up our average cash price by 5 cents.

Granted, it’s $4.15, but I think we’re starting to see a little bit of a shift more towards the demand side of these equations. So, we’ll just keep looking at that going forward.