The markets were looking for clues to the impact of coronavirus and the phase one trade deal with China in the Tuesday World Agricultural Supply and Demand Estimate (WASDE). Even USDA Secretary Sonny Perdue last month told reporters at Commodity Classic that he expected the March WASDE to reflect impacts from China trade and disease outbreak. Instead, the World Board offered up almost no change from the previous month in the U.S. crop and export outlook.
“That March report has a history of being uneventful,” Farm Journal economist and AgriTalk Radio host Chip Flory told AgDay. “This was about as uneventful as they can get for the domestic side of the markets.”
But Flory noted that USDA did signal some growth in the South American crop, particularly soybeans.
“They added 1 million metric tons to the Argentine bean crop,” Flory said. “They added 1 million metric tons to the Brazilian bean crop, which is now at 126 million metric tons. That added some to the carryover estimates for the global beans.”
Brian Splitt of AgMarket.net said he anticipates an eventual drop in the Brazilian corn crop.
“They left the corn in Brazil unchanged, and I think that’s potentially something that we could see reduced moving forward,” Splitt said. “Over the last month or so we were talking about how the wet weather in Brazil was delaying harvest of their soybeans, potentially impacting the planting of their safrinha corn crop. Now we’re looking at a warmer and drier bias, and so I wouldn’t be surprised if, moving forward, we start to see the Brazil corn estimates walk backwards a little bit.”
Flory noted that USDA did show some movement on the U.S. sorghum numbers, and that could be a positive indicator for future U.S. corn exports.
“USDA added 15 million bu. to the sorghum export estimate, took it up to 135 million bu.,” Flory said. “Now they partially offset that by taking 10 million bu. out of the sorghum feed and residual usage estimate, but we still got a 5 million bu. reduction in sorghum carry over.
“That’s a significant move for sorghum carry over. It makes me wonder what we’ve got left for exportable supplies of sorghum. We’ve got to be getting very tight on that, and if China was importing the sorghum with the full intent of using it for feed, well maybe that means that they’re going to have to make a move over and start buying some U.S. corn here in the near term, and not just corn but the DDGs as well.”