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USDA Adjusts Domestic Corn Ending Stocks.

U.S. and global stock numbers were tweaked slightly by the U.S. Department of Agriculture. On Tuesday, USDA released the U.S. ending stocks report and the World Agricultural Supply and Demand Estimate report.

After the record came out, Leslie Smith interviewed Tom Leffler of Leffler Commodities.  Leffler said there were no big surprises, as the numbers came in close to trade estimates.

The U.S. corn ending stocks came in at 1.777 billion bushels. Leffler said this was lower than what the trade was expecting and 50 million bushels lower than the February estimate and down 100 million from the January estimate. U.S. soybean ending stocks came in at 385 million bushels. Leffler said this was higher than what the traded expected, it was unchanged over February’s estimate and 25 million lower than the January estimate. U. S. wheat ending stocks was estimated at 691 million bushels. Leffler said this was lower than what the trade expected and one million bushels lower than February’s estimate, but four million bushels higher than the January report. In going back to the January estimate, Leffler said corn, wheat and soybeans prices are all trading lower, as there isn’t a lot of changes in U.S. stock numbers.

The amount of corn necessary to make a gallon of ethanol is less than previously believed according to USDA. In lowering the projected demand by the ethanol market for U.S. corn by 50 million bushels, the agency cited "a higher rate of conversion than previously assumed" as the reasoning for the adjustment. The information upon which this analysis was based came from the National Agricultural Statistics Service's new Grain Crushings and Co-Products Production report.

"What is most remarkable about this supply and demand report is the light it sheds on a topic of great concern to U.S. corn farmers- recognition of the growing efficiencies in the ethanol industry," said NCGA President Chip Bowling, a Maryland corn farmer. "For many years, we have strongly asserted that the ethanol industry continues to improve and those productivity gains should be taken into consideration. With the simple justification offered for the analysis, USDA made a great step forward in showing its growing appreciation for the advances made in ethanol production and, thus, the ever-increasing benefit it offers Americans."

While USDA estimates for corn use in ethanol production were lowered by 50 million bushels, the overall drop was partially offset by higher than expected production over the winter months. The demand decline was more than offset by projected increases in demand for corn from the export and feed and residuals markets of 50 million bushels each.

Projected ending stocks were lowered by 50 million bushels in light of the other adjustments. Average farm price estimates were raised by five cents at the midpoint to $3.50 to $3.90 per bushel.

USDA also released the March WASDE report on global production. Leffler said there was only one major change that stood out with USDA lowering the world corn stocks by 4.36 million metric ton. He said USDA lowered South American corn production by two million metric ton and they revised the domestic South African corn consumption for 2005 - 2010 crop years. World wheat stocks were decreased by 14 thousand metric tons, a small decrease. Leffler said there was a small increase in the world soybean stocks by 27,000 metric ton. Leffler said soybean production for Argentina and Brazil was left unchanged over last month with Argentina at 56 million metric tons and Brazil at 94.5 million metric tons.

 


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Agricultural Market Update: Grain Prices, Crop Conditions, and Weather Impacts

Welcome back to our channel where we provide comprehensive updates on the latest trends and changes in the agricultural sector. This week, we're looking at significant movements in grain prices, crop conditions, and the effects of weather patterns. Let's dive into the details:

Grain Price Decline Grain prices have fallen to their lowest levels since 2020, with December corn down 4.3% and November soybeans losing 3.1%. This decline is partly due to the beneficial moisture brought by Hurricane Beryl to the Midwest, which has improved crop conditions significantly. The USDA reported that corn and soybean crops are in their best condition in four years, contributing to the downward pressure on prices.

Record Short Positions and Market Sentiment Fund traders have increased their net short positions in the corn market to a record level, with a net short of 347,000 contracts of corn. This reflects a bearish sentiment in the market, further influencing grain price dynamics. Similar selling trends were observed in soybeans and SRW wheat, indicating broad market caution.

Weather Impact and Forecast Hurricane Beryl has brought significant rainfall across Arkansas, Missouri, western Tennessee, western Kentucky, and southern Illinois, with more expected over Missouri, Illinois, and Indiana in the coming days. Despite this, the market is currently more focused on the moisture benefits rather than potential heat risks forecasted in the 6-10 and 8-14 day periods.

US Crop Conditions Corn and soybean conditions have shown slight improvements last week, with corn rated 68% good to excellent and soybeans at 68%. These are among the best ratings for this time of year since 2020, suggesting robust crop health that could continue to influence grain prices.

Winter Wheat Harvest and Spring Wheat Conditions The US winter wheat harvest is progressing well, ahead of schedule with significant portions already harvested in Kansas and Texas. Spring wheat conditions are also favorable, with 75% rated good to excellent, although there have been some declines in states like Idaho, South Dakota, and Washington. Brazil's Corn Harvest and US Exports Brazil's second corn crop harvest is advancing rapidly due to favorable hot and dry conditions, with 63% of the crop already harvested. Meanwhile, US corn shipments saw a substantial increase last week, indicating strong export demand, which contrasts with the recent drop in domestic grain prices.

Ongoing Developments Lastly, the USDA reported a flash sale of corn, with significant quantities sold to unknown destinations, scheduled for delivery over the next two marketing years. This could signal ongoing international demand for US corn despite lower prices.

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