Apr 11 / Alef Dias and Thais Italiani

Post-WASDE Monthly Report - 2024 04 11

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"Comments about the results of USDA's report"

Soybeans: Without major adjustments, USDA increases US stocks and ignores changes in Brazil's crop

Figure 1: Brazil Soybean - Production (M ton)

On standby for the May report - when we will have the first estimates for the new crop - the USDA has now brought only marginal adjustments to the US soybean supply and demand picture and simply ignored the Brazilian production scenario.

In the US, the department confirmed lower demand, adjusting the export and use lines for seeds downwards. The pace of export sales  is close to the 5 years lows. As for seed use, the cut is in line with the fact that the area reported in the planting intention report came in below the area from the Agricultural Outlook Forum.

As for Brazil, the difference between USDA's reading for soybean production and Conab's is the biggest in history, 155M mt versus 146.5M mt, respectively.

Corn: Domestic consumption at full speed in the US

Figure 2: Corn Brazil - Production (M ton)

In line with market expectations, the USDA adjusted upwards two important lines of corn consumption in the US: animal feed and use for ethanol. As a result, US ending stocks were reduced, meeting market expectations given the figures in the latest quarterly stocks report.

For South America, the USDA lowered its reading for Argentina's crop, from 56 to 55M mt, reflecting a cut in production potential. As for Brazil, the department's decision was to keep its reading unchanged despite the recent cuts made by Conab. As with soybeans, the two entities' readings for corn are different from month to month, with the USDA estimating 124M mt while Conab is working with 111M mt.

It is worth noting that China's corn import projection remains at 23M mt, despite recent signs of a slowdown in the Asian giant's appetite.

Wheat: Bearish figures in the US steal market's attention

Figure 3: US Wheat - Ending Stocks (M ton)

Bearish US ending stocks figures weighed on prices amid bullish global figures. On the US balance sheet, domestic consumption was reduced due to lower-than-expected implied feed and waste use in the second and third quarters, based on the latest NASS Grain Stocks report. Consequently, ending stocks were increased by 25M bu, more than the median estimate.

However, the world figures brought some bullish points to consider. Although the market was expecting higher world ending stocks, the USDA presented a cut of 0.5M mt, due to increased exports from Ukraine and domestic consumption in India.

Food, seed and industrial use in India rose by 2M mt this month to 106.2M mt. The latest monthly stock reports issued by the Food Corporation of India show continued sales on the open market, as the government of India tries to limit food price inflation ahead of the elections, which start at the end of this month.

Ukraine's exports increased by 1.5M mt to 17.5M mt, as competitive prices and longer opening hours at Odessa's ports this year allowed for an increase in export activity.

Charts Legend

WASDE Commentary — Grains

Written by Alef Dias

Written by Thaís Italiani


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