April USDA Supply & Demand

Today we got USDA’s latest and greatest supply and demand estimates. This is typically not a big market moving event, but this was the first report they incorporate the stocks number from the report at the end of March. Soybean ending stocks came in slightly below expectations, but this will not be a big market mover because they seem to be waiting for progress on a deal with China before adjusting exports. We are well below the pace needed to reach their estimate but yet they did not change it today. Soybeans will continue to trade on the Chinese negotiation headlines.

Corn ending stocks came out just above expectations but within the range. The funds have continued to press the short side of the market and even added to their record short position last week. With this report behind us, the market will focus all attention to weather in the Midwest and news about the Chinese negotiation. The long term forecasts continue to add moisture to the Midwest. Planting progress showed almost no corn planted in the corn belt which was not a surprise. They are not late yet but time is quickly ticking by and with the fund short a spark is going to result in a large move if the fund position gets spooked.

Wheat domestic ending stocks were higher but the bigger was world ending stocks. The USDA revised them higher than expectations. USDA also gave us higher wheat condition ratings than the market was expecting last night which contributed to the weakness going into the report.

USDA lowered cotton domestic usage on cotton but left the balance sheet otherwise unchanged. Cotton has been the rare bright spot of the commodities and it is giving some of those gains back after the report. USDA also raised world carryout slightly but it is still down from only a couple years ago. Cotton needs a trade deal as bad as beans!

Now that this report is behind us, all the markets will be focusing on is trade and weather. We did not shift the range lower today so we will have to take that as a victory.