WASDE: Relatively Unchanged Balance Sheets

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 |  Includes: CORN, SOYB, WEAT
by: T. Marc Schober

March's WASDE was lackluster, at best. The USDA continues to beg the question of credibility; an example being their estimate of U.S. soybean ending stocks remaining unchanged even as February's exports exceed year over year numbers. U.S. corn exports continue to suffer as the USDA lowered domestic exports by 125 million bushels the last two months.

Corn

U.S. ending corn stocks for 2012/13 were unchanged this month as an increase in feed and residual disappearance was met with increased imports, and lower exports. The USDA projected a 75 million bushel decrease in corn exports due to the slow pace of shipments and expected competition from South America. Imports to the U.S. were increased by 25 million bushels due to increases in January's shipments. The season average price range was lowered 20 cents on the high end to $6.75 to $7.45 per bushel.

Global coarse grain supplies in 2012/13 were estimated 1.0 million tons lower due decreases in production from Argentina and South Africa. Global exports were lowered 1.9 million metric tons due primarily to the decline in U.S. exports.

Soybeans

U.S. 2012/13 soybean balance sheets are unchanged this month. Soybean ending stocks remain at 125 million bushels. Soybean exports through February were exceeding last year's pace, but competition from South America in the coming months are expected to reduce U.S. soybean exports. The projected season average price range has been narrowed by $0.25 on both ends of the range to $13.80 to $14.80 per bushel.

Argentina's soybean production was decreased by 1.5 million metric tons and we will continue to monitor South American production as it will greatly influence U.S. exports and price.

Wheat

Domestic wheat exports were lowered by 25 million bushels resulting in an increase of 25 million bushels for projected 2012/13 ending stocks. Competition from EU-27 and FSU-12 have decreased export prospects for wheat. The season average wheat price for 2012/13 was narrowed $0.10 at the midpoint to $7.65 to $8.95 per bushel.

Outlook

March's WASDE might be uninspiring, but as we approach spring and the beginning of planting season there should be plenty of fireworks to follow. One of the most influential points being whether or not the U.S. will plant almost 100 million acres of corn, the most planted since the 1930s.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.