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Demand metrics disappointed today from the Ag Forum, NOPA and Exports, gearing the USDA up for a bearish marketing year. Despite no leading story, wheat was the biggest loser today. March corn is showing that prices are at the bottom of the channel and technical indicators are extremely oversold. The March soybeans made new lows this morning and are still in a downtrend with all the moving averages are pointed down.
The USDA released their Ag Forum numbers this morning.
They pegged corn acres at 91 million, which was slightly lower than the average trade estimate. They used a 181 bu/acre yield, which is roughly a trendline yield and is likely what we will see them use in the May Supply/Demand report (their first ‘official’ 2024 outlook). They increased corn demand only 150 million bushels. Bottom line, the USDA estimated a 24/25 corn carryout of over 2.5 billion bushels (high since at least 1991). Historically that is associate with a sub-$3 average farm price, BUT the USDA still projected average farm price for this year at $4.40 – a sign to me they are factoring in inflation.
The bean acreage was the shocker at 87.5 million acres (1 million higher than average trade estimates) that is A LOT of bean acres. The USDA used a yield of 52.0. The bean carryout was projected at a whopping 435 million bushels.
Wheat stocks were pegged at 769 million bushels which is a high since 2020.
Export sales this morning showed that were within expectations, but on the high end for corn, and the low for beans and wheat. Corn remains slightly behind its seasonal pace needed to hit the current USDA estimate with soybeans slightly ahead, though neither varying enough to cause action on said USDA 2023/24 estimates in last week’s February S&D. Export sales are slow overall due to a strong U.S. dollar and plentiful supplies coming from South America.
NOPA crush values disappointed today at 185.780 mil bu vs. 189.928 estimated. Given the January cold snap, this is not a bad run. It is still +3.8% year/year. YTD pace is +5.4%. If remaining year runs +4% to +6% we'll exceed USDA by 13 - 37 million bu.
Funds were sellers across the board today.
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