Latest WASDE Report and Trade with China - Tuesday, 11 April 2017

Latest USDA worksheet from Reuters News summarizing April’s WASDE report findings.

USDA 2016-17 U.S. grain and soybean ending stocks/billions

 

USDA April

Average of

Range of

USDA March

 

2016-17

analysts'

analysts'

2016-17

 

end-stocks

estimates

estimates

end-stocks

 

estimates

   

estimates

         

Wheat

1.159

1.147

1.100-1.200

1.129

Corn

2.320

2.352

2.270-2.484

2.320

Soybeans

0.445

0.447

0.410-0.475

0.435

 

USDA 2016-17 world grain and soybean ending stocks/millions of tonnes

 

USDA April

Average of

Range of

USDA March

 

2016-17

analysts'

analysts'

2016-17

 

end-stocks

estimates

estimates

end-stocks

 

estimates

   

estimates

         

Wheat

252.26

250.24

248.50-253.00

249.94

Corn

222.98

221.81

219.50-225.15

220.68

Soybeans

87.41

83.91

81.50-85.75

82.82

 

USDA 2016-17 South American corn and soy production

 

USDA April

Average of

Range of

USDA March

 

2016-17

analysts'

analysts'

2016-17

 

estimate

estimates

estimates

estimate

         

ARGENTINA

       

Corn

38.50

37.79

37.00-38.50

37.50

Soybeans

56.00

55.89

55.00-57.50

55.50

BRAZIL

       

Corn

93.50

92.43

90.50-94.00

91.50

Soybeans

111.00

109.86

107.00-111.56

108.00

 

USDA world production

 

April USDA

March USDA

April USDA

March USDA

 

2015-16

2015-16

2016-17

2016-17

 

estimate

estimate

estimate

estimate

         

Argentina wheat

11.30

11.30

16.00

16.00

Australia wheat

24.17

24.17

35.00

35.00

Canada wheat

27.59

27.59

31.70

31.70

Russia wheat

61.04

61.04

72.53

72.50

         

South Africa corn

8.21

8.21

15.00

14.60

China corn

224.63

224.63

219.55

219.55

Ukraine corn

23.33

23.33

28.00

28.00

 

The debate has already started regarding wet conditions and the spring planting progress. The bulls of course are pointing to that fact that weather forecasters are calling for exceedingly wet conditions for some portions of the Corn Belt and perhaps as a result farmers may reduce their corn acres even beyond the -4 million expected.  As we all have learned though weather can change very quickly and producers can plant an enormous number of acres in a short amount of time if necessary.  For example in 2015 planting progress increased from just 19% to 55% in one week, so the rainfall that is frustrating producers and keeping them out of the fields now will continue to be viewed as beneficial by the markets bears for a while yet.  Currently planting progress shows an “average start” overall but the bigger producing states like Illinois and Kansas are off to a slow start.  Last year Illinois had 2% of the corn planted this year 1% with an average of 5%, Kansas had 15% in by this time and this year only 4% is planted with an average of 8%.

 

 

One of the few headlines supporting soybeans right now is the recent meeting between U.S. President Donald Trump and the Chinese President Xi last week. There has been a great deal of concern regarding possible trade policy changes and their effects on our trading relationship with China. “Thoughts are political changes that are more pro-growth here in the U.S. will eventually spillover and help increase growth in the global economies.  The hope is in the process of promoting growth here I the U.S. we can avoid igniting or sparking a full-blown trade war with any of the bigger players.” The meeting between the two leaders has begun to calm many of these fears with the announcement that China is dropping a 14 year old ban of U.S. beef, this ban was put in place during the 2003 mad cow scare.  This is a significant break-through, beef consumption in China has grown by +33% from 2012 to 2016.  In an effort to alleviate some of the current $347 billion trade deficit they have with the U.S. they have also agreed (not officially) to buy more grains and other agricultural products from the U.S. and is considering buying more U.S. agricultural exports. This is welcomed news for all sectors of the Ag community. The USDA does not have any planting data to share for soybeans for this past week.

Governor Jerry Brown of California announced on April 7th that the emergency drought period is officially over. The water years of 2012 through 2016 had the four driest precipitation years on record for the state.  The Governor warned California residents that, “This drought emergency is over, but the next drought could be around the corner, conservation must remain a way of life.”

2 different disturbances are forecast to move across the country later this week. The Plains and Midwest are expected to receive the largest rainfall totals which is likely to delay all field work this week.  The map below shows the 5 day rainfall forecast that takes us through Sunday.

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