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In a Ho Hum WASDE Report There was One Interesting Number


The March USDA World Agricultural Supply and Demand Estimates (WASDE) report was mostly a non event. The domestic corn and wheat balance sheets were completely unchanged. For soybeans the USDA made some small, but maybe significant house keeping changes. What does this mean going forward?

In many years the March USDA report offers very little in the way of new information. New crop estimates are not included yet and old crop changes are usually small. The bigger report is on March 31st with Perspective Plantings and Quarterly Grain Stocks. With that Quarterly Grain Stocks report giving us a better look into the demand situation the USDA often decides to punt on any major demand changes on this March WASDE, which was the case again this year.

However, there were some small but interesting changes on the domestic soybean balance sheet. This was viewed as being mostly house keeping in nature ahead of the March 31st reports. The USDA lowered last years production by 1 million bushels, raised seed demand by 4 million bushels, lowered residual by 5 million bushels, and lowered the soybean crush by 10 million bushels. The net result was a 10 million bushel increase in ending stocks. The reduction in crush demand was mostly expected and was the reason for increasing ending stocks. The other changes were small, offsetting changes that seemed to be centered around increasing seed demand without increasing domestic usage.

The interesting thing about this is that it seems that the USDA went out of their way to increase seed demand before the key end of the month reports. The increase in seed demand is likely a reflection of the USDA’s outlook projections that we saw a week and a half ago. However, at 96 million bushels of seed demand the implication is that soybean acreage could be slightly higher than the Outlook projections and very close to the 82.7 million acres planted last year.

Source: Ted Seifried, AgWeb.com

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