U.S. Wheat Farmers Face Headwind of Record World Wheat Production, Leffler SaysTue, 09 Feb 2016 16:43:17 CST
The U.S. continues to battle plentiful global wheat supplies and the weakest export sales in more than 40 years. That’s according to Market Analyst Tom Leffler of Leffler Commodities. On Tuesday, the U.S. Department of Agriculture released the latest U.S. ending stocks and the World Agricultural Supply and Demand Estimate (WASDE) reports. Leffler said the latest domestic and global ending stocks reports offered nothing price supportive for wheat, corn or soybeans.
The U.S. ending stocks report came in close to trade expectations. Leffler said the report as a whole was slightly negative, as there were changes in demand. U.S. corn ending stock came in at 1.837 billion bushels. That was 35 million bushels higher than the January report. U.S. corn export sales were lowered by 50 million bushels. Corn use for ethanol was increased by 25 million bushels. U.S. soybean ending stocks came in at 450 million bushels. That was ten million bushels higher than the January estimate. USDA lowered the bean crush in the U.S. by ten million bushels, while export sales were left unchanged. Leffler said there was no good news for the wheat market, as USDA increased ending stocks to 966 million bushels. That was 17 million bushels higher than what the trade expected and 25 million bushels higher than the January estimate. He said this was the highest U.S. ending stocks since the 2009-2010 marketing year. Export sales came in 25 million bushels lower than last month. Leffler said that was the lowest export sales for wheat since the 1971-1972 marketing year.
Negative news also came out of the monthly WASDE report. Leffler said world is looking at record large world wheat ending stocks and world wheat production. World wheat ending stocks were increased by almost seven million metric tons. He said adjustments made by China accounted for about four million tons. Global corn ending stocks were adjusted lower by 130,000 metric ton. Leffler said Argentina’s corn production was raised by 1.4 million metric ton and Brazil’s corn production was increased by 2.5 million metric ton. World soybean ending stocks were increased by over one million metric tons. He said Brazil’s bean crop estimate was left unchanged from the January estimate of 100 million metric tons and Argentina’s bean production was increased by 1.5 million metric tons to 58.5 million metric tons.
“So, the bottom-line we saw U.S. and world numbers not price supportive,” Leffler said.
With these USDA reports out of the way, Leffer said traders will be watching the weather in South America to see how their crops progress, as well as for spring field work and planting in the U.S. USDA will also release the March WASDE report, but Leffer said the larger factor will be the prospective plantings and quarterly stocks reports that come out the end of March.
Radio Oklahoma Ag Network’s Leslie Smith interviewed Leffler for analysis. Click or tap on the LISTEN BAR below to hear the full interview.
Click here for the U.S. ending stocks report.
Click here for the World Agricultural Supply and Demand Estimate report.
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