WASHINGTON — The U.S. Department of Agriculture’s “data dump” on Feb. 8 has come and gone and was characterized as somewhat of a dud as far as major report days go. Regularly scheduled supply-and-demand data, along with key data delayed from January due to the partial federal government shutdown, provided few surprises and little market reaction along with mixed signals of ample supply but good demand, at least in some cases.
Probably the greatest surprise was the Winter Wheat and Canola Seedings report, delayed from Jan. 11. The U.S.D.A. estimated winter wheat seeded for harvest in 2019 at 31,290,000 acres, down 4% from 2018, the smallest in records back to 1909 and below the full range of pre-report trade expectations. Some in the trade think the 2019 area may be even lower because of weather conditions last fall and through the winter. But other data mostly offset the impact of the depressed winter wheat acreage, and wheat futures ended narrowly mixed on Feb. 8 with winter wheat futures little changed and spring wheat edging higher at midweek last week.
Offsetting the planting decline was a boost in forecast June 1, 2019, U.S. wheat carryover at 1,010 million bus, up 3.7% from the December forecast and 1.7% above the average of trade expectations. Estimated Dec. 1 wheat stocks in all positions at 1,999 million bus were up 7% from a year earlier and were 2.4% above the trade average. On the brighter side for wheat, the U.S.D.A. lowered from December its forecast of 2018-19 global ending stocks by 0.2% to 267.53 million tonnes, which was down 4.5% from a year earlier. Further, U.S. wheat has been included in several recent export sales due primarily to higher world prices and the tightening of supply in the Black Sea region, which had been dominating foreign sales.
The Feb. 8 data were no more exciting for other markets, with prospects for corn demand still the most promising while uncertainty about trade with China continued to loom over soybeans. Data for corn and soybeans are especially important for farmers still making spring planting decisions for the 2019 crop.
In its Crop Production 2018 Summary, the U.S.D.A. estimated corn production at 14,420 million bus, down 1.4% from the prior estimate, down 1.3% from 14,609 million bus in 2017 and down 4.8% from the 2016 record of 15,148 million bus but still the third highest on record. The number was below the average of trade expectations. Dec. 1 corn stocks were estimated at 11,952 million bus, down 4.9% from a year earlier and near the low end of trade expectations. U.S. corn carryover on Sept. 1, 2019, was forecast at 1,735 million bus, down from the prior forecast and from 2018 but slightly above the average of trade expectations. But global ending stocks were raised slightly. Corn futures, meanwhile, edged a couple cents higher by Feb. 13.
U.S. soybean production was estimated at a record 4,544 million bus, down 1.2% from the prior estimate, up 3% from 2017 but slightly below the average of trade estimates. The record crop came at the worst time for U.S. soybean farmers because of the loss of their major buyer — China — during much of last year. Dec. 1 soybean stocks were estimated at a record 3,736 million bus, up 18% from a year earlier and near the high end of trade expectations. Soybean carryover on Sept. 1, 2019, was forecast at 910 million bus, more than double the year-earlier carryover but down 4.7% from December and slightly below the trade average. World soybean ending stocks, meanwhile, were projected at 106.72 million tonnes, down 8% from the prior forecast, due in part to lower production estimates for the United States and especially for Brazil, but up 9% from 2017-18.
China has resumed buying since December, though marketing year sales to date are far behind a year earlier. And Brazil, which stepped up to fill the U.S. sales void to China, has been trimming its soybean crop (now being harvested) due to adverse weather. Soybean futures have held up amazingly well considering market conditions the past several months and edged up a few cents after the Feb. 8 reports.
Despite what has seemingly been one of the most tumultuous years for agricultural markets for some time, winter wheat and corn futures still are trading above year-ago levels while spring wheat futures are down about 5%. Soybean futures are down the most from a year earlier, understandably, with a decline of about 10%.
The bottom line from the reports is there is no shortage of wheat, corn or soybeans in the United States or globally, but demand is sufficient to maintain prices in most cases, and producers and users now have a bit more direction.