Ag Market View for Mar 31.23
March 1st stocks at 1.685 bil. bu. were at the low end of the range of estimates and 68 mil. bu. below the average trade guess. Our estimate was 1.695 bil. while YA stocks were 1.932 bil. Mch 1st stocks represent 59% of the Sept thru Feb total usage, down from 69% YA which is also the 10-year average, however well above the 49% from 2020/21. The old crop rationing job is a bit tougher than previously thought. 2023 planted acres at 87.505 mil. was 730k acres below the average trade guess and at the bottom end of the range of estimates. Today’s USDA est. was in line with YA planted acres and the Feb-23 Outlook Conference. After bottoming out just under $12.50 last week, Nov-23 soybeans have surged back above the $13 level. Final soybean acres have been below the March est. the past 4 years. The largest net gain in soybean acres from Mch. Intentions to final was 3.3 mil. in 2012. Argentina announced plans for a 3rd preferred currency program to stimulate farmer soybean sales. Specifics of the new “soy dollar” program to be announced early next week. China has reported switched up to 1 mmt of soybean purchases for their reserves from Argentina to the US.
March 1st stocks at 7.401 bil. bu. were within the range of estimates however 79 mil. bu. below the average estimate. Our est. was 7.505 bil. while YA stocks were 7.758 bil. Mch 1st stocks were the lowest in 10 years, with this year’s figure representing 96% of the Sept thru Feb total usage, up from 91% YA and just below the 10-year average of 100%. With the lower than expected stocks figure we’ll likely see a bump up of 50 – 75 mil. bu. in feed/residual usage in the April-23 WASDE report. The current USDA feed/usage forecast at 5.275 bil. is down 8% from YA. May-23 corn closed above both the 50 and 100 day MA’s, and at its highest level in just over 5 weeks. Principal crop acres in the US are expected to increase 6 mil. to 318.1 mil. acres, the highest in 5 years. The USDA corn planted acres est. at 92.0 mil. was 1.15 mil. above the average trade guess and up 3.42 mil. from YA. Our est. was pretty close at 91.5 mil. Final corn acres have been below the March est. 3 of the past 4 years. The largest net drop in corn acres from Mch. Intentions to final was 6.3 mil. in 2020. The states with the largest YOY increase were ND up 850k, MN up 350k, IN up 250k, while acres in both IL and IA are expected to increase by 200k. Safras & Mercado raised their Brazilian corn production forecast by nearly 5 mmt to 130.3 mmt, well above the USDA forecast of 125 mmt. As we flip the calendar to April, US and Central Brazilian weather will be the key driving force in agricultural commodity valuation. Current US weather is supportive, too wet in Southern Midwest/Delta, too dry Southern plains, and too cold in the Northern plains. 2nd corn crop prospects in Brazil remains high, however more rains will be needed by mid-April.
March 1st stocks at 946 mil. bu. were within the range of estimates however 18 mil. bu. above the average estimate. Stocks from Dec 1st were revised up by 32 mil. bu. to 1.312 bil. Not sure how the USDA will incorporate that into the WASDE report…higher imports, lower domestic usage, higher production? Mch 1st stocks represent 65% of the June thru Feb usage, down from 68% YA and the lowest in 9 years. The all wheat acreage figure of 49.86 mil. was 1.17 mil. above the average trade est. and at the upper end of the range of estimates. The winter wheat acreage est. was revised up by 1.2 mil. from Jan-23 to 37.5 mil., 4.2 mil. above YA and the highest since 2015. We’ll start issuing production forecasts once we have a few weeks of crop condition data, but clearly the level of abandonment will be likely be significantly above the historical average without soaking rain soon in the US Southern plains. Spring wheat acres 10.57 mil. were 325k below expectations and the lowest in over a decade.
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