WASDE report: Larger-than-expected boost to US soybean stocks forecast
Before the report, the Chicago March-24 futures contract had gained 0.8%, but post-report, it slipped 0.2% into negative territory. Similarly, Corn futures for March-24 initially reacted hesitantly to an unexpected increase in the estimate for US carryout stocks but later recovered some losses, as reported by those UK analysts.
An hour after the WASDE report release, wheat futures for March-24 exhibited a 2.2% decline, aligning with pre-report trading levels, found the CRM Agri team.
Corn crop outlook
The USDA raised its forecast for US corn stocks at the end of the season by 250Kt to 55.2Mt. Globally, the estimate for carryout stocks saw a more substantial reduction than anticipated, down by 3.2Mt to 322.1Mt, surprising traders, wrote the analysts.
Brazil's corn crop was downgraded by 3.0Mt to 124.0Mt, consistent with market expectations but exceeding Brazil's own Conab bureau forecast, which was lowered by 3.6Mt to 113.7Mt. Brazil's 2023/24 corn exports were projected at 52.0Mt, 2.0Mt below the previous month's figure, with Ukraine expected to compensate, as its corn export estimate increased by 2.0Mt to 21.0Mt, though still below last season's 27.1Mt.
Soybean stocks
The USDA significantly increased its forecast for US soybean carryout stocks for 2023/24 by 950Kt to 8.6Mt, surpassing trader expectations. The revision was attributed to a decreased estimate for US exports, reflecting slower shipments through January and strong competition with Brazil.
Contrary to the global trend, the forecast for Brazil's soybean exports in 2023/24 was raised by 500Kt to 100.0Mt, even as the harvest estimate was trimmed by 1.0Mt to 156.0Mt. The USDA attributed this export upgrade to a robust year-to-date pace of shipments from October to January.
The estimate for world soybean stocks at the season's end saw a smaller-than-expected increase of 1.4Mt to 116.0Mt, factoring in higher carry-in inventories due to an upgrade in Brazil's 2022/23 harvest, noted the UK oilseed and grain market specialists.
Conab reduced its forecast for Brazil's 2023/24 soybean crop by 5.9Mt to 149.4Mt and lowered its export outlook by 4.3Mt to 94.2Mt.
Wheat inventories
The USDA raised its forecast for US wheat carryout inventories by 280Kt to 17.9Kt, citing reduced food use. This figure surprised traders who expected it to remain steady, commented the CRM Agri reviewers.
Globally, the USDA unexpectedly downgraded its estimate for end-stocks by 600Kt to 259.4Mt, an eight-year low, driven by increased food use expectations in India and a 400Kt rise in feed use in the UK.
The USDA made several revisions to its UK balance sheet estimates, cutting the wheat harvest-23 production number by 300Kt but increasing the forecast for 2023/24 carryout stocks by 500Kt to 2.4Mt on a revised trade balance. Imports were projected at 2.1Mt, up 100Kt from last month's forecast, while the export figure was reduced by 1.1Mt to 800Kt.
