May WASDE: ?Relatively in line with expectations?

by | May 12, 2020 | 5 Ag Stories, News

Tuesday?s World Agricultural Supply and Demand Estimates report did not take analysts by surprise.

The U.S. Department of Agriculture (USDA) today (Tuesday) released its monthly World Agricultural Supply and Demand Estimates (WASDE) report. Joe Lardy, CHS Hedging market research analyst, says ?most numbers came in line with expectations.?

?We didn?t see a big curveball, or surprise piece of information in today?s report that would leave the market scratching its head,? Lardy said. ?For the most part, when we look at the U.S. side of the ledger, the carryouts analysts predicted prior to the report came in relatively in line.?

Officials raised old crop corn ending stocks by six million bushels (mbu) to two-point-zero-nine-eight billion bushels (bbu). The increase comes from a boost to exports, as well as feed use assumptions. New crop corn carryout, on the other hand, is forecasted at 3.318 bbu.

Old crop soybean ending stocks came in at 580 mbu, up 100 mbu for April. The increase stems from cuts to exports. New crop soybean carryout is forecasted at 405 mbu.

Producers should keep an eye on acreage numbers moving forward. “They could have serious implications for carryout,” shares Lardy.

“The government is using 97 million acres on corn, which is a large number. What that’s doing is leading to a large carryout,” Lardy said. “A lot of analysts think that number is a little bit lower. I’ve heard ranges (of) 92- to 95 million acres.”

Analysts will receive a better picture of planted acres in the June Acreage report.” The report could have an “interesting impact on the balance sheet,” according to Lardy.

“If we maintain 97 million acres, we have a carryout of over three billion bushels. That’s going to weigh heavily on the market and prices. It’s going to create a tough environment for us to rally prices, even if we would see a little bit of pickup on the export side,” Lardy said.