The February USDA report is usually not viewed as a major event but this year subtle changes were noted by the trade that we take note of.
USDA played with the wheat tables lowering imports 20 mil bu to 160 and this enabled them to lower exports 25 mil bu to 900 mil without taking ending stocks up more than 5 mil to 692 mil bu. The stocks that were added were primary SRW and HRW while spring was reduced 20 mil. Assume they lowered the Canadian spring wheat imports. With the weakness in the Canadian dollar, not sure we have seen the end to these but the demand has certainly fallen off as domestic mills seem to have had enough? This did manage to put prices back on their heels today with the market selling off sharply.
USDA added 1.7 MMT to the beginning stocks of World wheat. Production increased 1.7 MMT to 725 MMT. The primary increase came in Arg and FSU. Usage was increased slightly but ending stocks were increased 1.9 to 197.9 MMT MMT.
The changes in feedgrains started in sorghum. Feed use was cut 10 to 110 mil bu. Industrial use was cut 15 to 30 mil bu. This made room for an increase of 30 mil in exports to 300 mil bu—all based on ongoing China buying interest. Corn domestic feed was also cut 25 to 5.250 bil bu. Both the sorghum and corn feed reductions represents a change in residual use. The surprise in corn came on a 75 mil bu increase in ethanol grind to 5.250 bil bu. Suspect this change was based on margins of Dec-Jan with major corrections making it unlikely this usage will be maintained? This led to a 50 mil bu cut in ending stocks to 1.827 bil bu.
World corn beginning stocks were also increased 1.6 MMT with all coming in exporter stocks—So Africa, Brazil and Arg. Production was increased 3.2 to 991.3 MMT with Arg and FSU increased 1.0 each with smaller increases in EU and Mex. Imports were increased 2 to 112 MMT. Came on increases in EU, Canada and China. Ending stocks were up slightly to 189.6 MMT.
Bean imports were increased 10 to 25 MMT. Crush was increased 15 to 1.795 bil bu. Exports were increased 20 to 1.790 bil bu. This led to a 25 mil reduction in ending stocks to 385 mil bu. Oil yields were reduced .1 to 11.465 pounds per bu so that increased crush only added marginally to the oil production. Crush sources indicate these yields may need to be reduced further. Exports were reduced slightly leading to a 75 mil pound increase in ending stocks to 1.505 bil pounds. The increased crush took meal production up 300 thou short tons. This flowed into larger domestic use leaving ending stocks at 300 thou short tons.
Increase in Arg bean production offset a loss in Brazil. China was also increased slightly. Arg crush was increased 1.1 MMT adding to the increase in the US. Imports were only increased slightly with China unch at 74.5 MMT. Ending stocks were reduced 1.5 to 89.3 MMT.
At the end of the day USDA should be questioned on a few items. Raising the ethanol grind considering what has happened to margins is one item. Another is no explanation of world corn increasing stocks – it is all China and really does not impact world trade. Sorghum acreage should expand dramatically considering that 70% of our production, 300 million bushels, went to exports of which almost all was to China. Prices were $1 over corn or more and yet milo delivered China was $2.50 under their corn values. Interesting stats with little mention. More tomorrow on QTfarms about this.