The Good: USDA’s WASDE report today came with few surprises as most of the report was a copy of last month’s release. World wheat ending stocks were dropped by three million tonnes to 301.2 million tonnes. Given that the USDA increased their estimate of Australian wheat production to 33.0 million tonnes, a reduction in stocks seems like a long shot. A slight change of an increase in feed use in China of five million tonnes to 35 million tonnes caused a similar reduction in Chinese ending stocks. A mere increase of three million tonnes in Australia was easily wiped away by the Chinese feeding. At least that was good for a rise of nearby five cents per bushel in the nearby spring wheat market.
The Bad: The rains in Brazil have certainly wreaked havoc with the 2021 soybean harvest in the northern growing areas of the country. The USDA has decided that rains make grain and increased their production estimate for the Brazilian crop to 134 million tonnes. MarketsFarm believes that the USDA will have to readjust this estimate downwards when the final numbers come in later this spring. The rains have not only delayed harvest, but have also caused increased harvest losses in Mato Grosso and the northern parts of Mato Grosso do Sul. The soybean harvest in Mato Grosso was only 67.5 per cent complete at the end of last week. Rains so far this week have only been in the 50 mm to 100mm range.
The Ugly: The world ending stocks of vegetable oils were increased by USDA to 22.2 million tonnes which is up 521,000 tonnes from last month. Increases in palm oil and sunflower oil stocks more than offset the reductions in the other oilseeds. Before you become overly concerned about the increased stocks of vegetable oils note that the ending stocks of vegetable oils are still less than one month for the current crop year. That is the reason why May soybean oil contract closed today at a new contract high of 53.55 U.S. cents per pound.