Chad Hart, ISU Extension Grain Marketing Economist, provides a summary of the latest WASDE report.
In the reports released today, usage declined, but by less than the trade expected, so futures moved slightly higher with the release of the report. For corn, feed usage was increased by 150 million bushels. This is due to corn directly replacing part of the loss of distillers grains as ethanol plants close and distillers disappears. Ethanol usage of corn declined by a staggering 375 million bushels. At least eight ethanol plants that have idled, with many more slowing production. The weekly fuel report from the Energy Information Administration showed a roughly 40% cut in ethanol production over the past two weeks. Add in a couple of other minor adjustments and ending stock projections rose 200 million bushels, putting 2019/20 ending stocks at just shy of 2.1 billion bushels. USDA lowered its 2019/20 marketing year price estimate 20 cents, to $3.60 per bushel.
For soybeans, crush was raised 20 million bushels, but exports were lowered 50 million. The increased crush is to create more soybean meal (again, replacing distillers grains). Export pace, while improving, has been well below what was needed to reach USDA’s original export estimate. Factor in a 25 million bushel drop in seed and residual (mainly an adjustment to the planted acreage number), and 2019/20 ending stocks rose 55 million bushels to 480 million in total. The 2019/20 marketing year average price estimate was lowered 5 cents to $8.65 per bushel.
While the WASDE report did not reflect positive news from exports. The weekly Export Sales report did show higher than expected corn sales, along with soybean sales that were within expectations, but at the higher end. China has been a pleasant surprise in the corn market (up 88% for the year). The Asian markets, outside of China, have been improving for soybeans.
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