Supply and Demand Data & The Ag Economy Barometer - Wednesday, 11 May 2016

The USDA delivered a bit of a surprise to the market yesterday in the May Supply and Demand report.  A few of the highlights:

Soybeans

  • The estimated crush for new crop was raised from 1.880 billion bushels for old crop to 1.915 billion bushels for new crop.
  • Export projections for new crop soybeans were increased from 1.740 billion bushels for old crop to 1.885 billion for the new crop.
  • Expectations for South American crops were lowered. Argentina production is expected at 56.6 MMT compared to an earlier projection of 59 MMT, Brazil’s production dropped from 100.0 to 99.0 MMT.

Corn

  • Estimates for new crop corn exports were raised from 1.725 billion bushels on old crop to 1.900 for the new crop.
  • Corn usage for ethanol was raised to 5.3 billion bushels vs the old crop at 5.250.
  • The South American projected numbers for corn production fell from 28 to 27 MMT’s in Argentina and from 84 to 81 MMT’s in Brazil.

The global corn supply for 2016/17 is expected to reach a record level of 1,543.2 million tons, this is an increase of 41.0 million.

 

USDA Supply and Demand Tuesday, May 10, 2016 Worksheets

US Ending Stocks 2015/16

 

May #

Average Trade Est.

Trade Range

USDA April

Corn

1.803

1.841

1.762 - 1.890

1.862

Soybeans

0.400

0.426

0.395 - 0.445

0.445

Wheat

0.978

0.981

0.961 - 1.011

0.976

U.S. Ending Stocks 2016/17

 

May #

Average Trade Est.

Trade Range

USDA April

Corn

2.200

2.294

1.950 - 2.555

NA

Soybeans

0.305

0.405

0.290 - 0.500

NA

Wheat

1.029

0.997

0.820 - 1.140

NA

Global Ending Stocks 2015/16

 

May #

Average Trade Est.

Trade Range

USDA April

Corn

207.04

205.75

200.50 - 209.00

208.91

Soybeans

68.21

76.28

71.50 - 78.32

79.02

Wheat

257.34

239.77

238.30 - 241.20

239.26

U.S. Wheat Production

 

May #

Average Trade Est.

Trade Range

2015/16 Prod.

All Winter

1.427

1.384

1.220 - 1.572

1.370

HardRed Winter

0.863

0.818

0.678 - 0.978

0.827

SoftRed Winter

0.357

0.364

0.340 - 0.399

0.359

White Winter

0.208

0.200

0.180 - 0.223

0.184

All Wheat

1.998

1.981

1.825 - 2.219

2.052

South American Crop Production 2015/16

 

May #

Average Trade Est.

Trade Range

USDA April

Argentine
Corn

27.0

27.64

27.00 - 28.50

28.00

Argentine
Soybeans

56.5

55.73

53.00 - 58.00

59.00

Brazilian
Corn

81.0

80.46

78.00 - 83.00

84.00

Brazilian
Soybeans 

99.0

99.42

98.50 - 101.50

100.00

Kevin Van Trump from the Van Trump Report cautions producers that “there’s a strong chance a lot of the bullish cards have been flipped over.  U.S. soybean acres are more than likely moving higher, especially with more rains in the forecast and longer-term delays in final corn planting.”  In addition the shift in policy in China there is a strong possibility that China may cut-back imports now that they are dumping their domestic soybean inventory. 

Some days are just better than others, we can blame the weather or daily routines but for many producers crop price movements can either make or break most days. Purdue University has joined with the CME Group to create a method to measure the mindset of producers it’s called the Ag Economy Barometer.  The information for this is gathered every month and is based on survey responses from 400 agriculture producers from around the country.  These surveys measure the perceived “health” of the Ag economy based on the responses to the following 5 questions listed here:

  • We are interested in how farmers are getting along financially. Would you say that your operation today is financially better off, worse off, or about the same compared to a year ago?
  • Now, looking ahead, do you think that a year from now your operation will be better off financially, worse off, or just about the same as now?
  • Turning to the general agricultural economy as a whole, do you think that during the next twelve months there will be good times financially, or bad times?
  • Looking ahead, which would you say is more likely, U.S. agriculture during the next five years will have widespread good times or widespread bad times?
  • Thinking about large farm investments – like buildings and machinery — generally speaking, do you think now is a good time or bad time to buy such items?

From the graph you can see that the general outlook from December, 2015 through March, 2016 was moving quite consistently lower.  During the month of April we see a swing higher on the graph, this is likely due to the improvements in prices for corn and especially soybeans during that time.  While the April response is encouraging the majority also reported that they expect “bad times” financially for the entire Ag community for the next year.

The El Niño weather pattern continues to hang around.  NOAA recently issued a La Niña Watch which simply indicates that there is a 50% chance that La Niña will develop sometime during the next 6 months.  The Austrian Bureau of Meteorology finds that the tropical Pacific Ocean has now weakened to “borderline El Niño-neutral levels” and in March NOAA reported that the heat content found in the central Pacific had dropped to below normal temps for the first time in a year.  The next ENSO update from NOAA will be tomorrow, I hope to bring you their latest predictions next week.

 

 

This map shows forecasted precipitation from today, May 11-Monday, May 16th.

 

The maps for May 15-19 show cooler than normal temperatures are expected to continue through a large portion of the U.S.  Precipitation for the upper Midwest is projected to be below normal while much of the rest of the country can expect above normal precipitation.

Month of May forecast created April 30th

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