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USDA Cuts Soy, Corn Ending Stocks, but Gro Predicts Deeper Reductions Are Needed

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The USDA sharply cut estimates for US ending stocks of soybeans and corn. The move reflects increases in US exports as a result of poor harvests in South America and shipment disruptions caused by the Russia-Ukraine war.

In its March WASDE report, the USDA reduced soybean ending stocks by 12.3% as US exports benefit from reduced soybean production in Brazil due to drought. 

But Gro expects US soybean ending stocks might need to be cut more. Gro’s forecast models predict that Brazil soybean production will be lower than USDA estimates, and that US soybean exports will exceed the department’s projection. FOB soybean export prices in Brazil have lost much of their advantage over US prices at the Gulf. 

China accounts for roughly half of US exports of old crop soybeans so far this year and has sharply ramped up advance purchases of the new crop. US soybean sales commitments to China for the new crop total 4.4 million tonnes, the largest on record for this time of year.

For corn, the USDA cut US ending stocks by 6.5%, aligning with Gro’s estimates. Stalled corn shipments from Ukraine as the war rages on, coupled with lower Argentine corn production, should benefit US corn exports, whose FOB export prices are competitive globally. In addition, soaring crude oil prices should spur higher US ethanol production

Ukraine shipped nearly 3 million tonnes of corn last March and April. The closure of Ukraine’s ports means supplies this year will have to be replaced by other major exporters. Argentina is unlikely to fill the gap, as Gro’s Argentina Corn Yield Forecast Model is indicating the country’s corn production will drop by double-digit percentages, well below the USDA’s estimates. 

Brazil is still planting its second corn crop, or safrinha, and Gro users can monitor the in-season progress with Gro’s Brazil Corn Yield Forecast Model.

US wheat exports have so far not been affected by shipment disruptions from the Black Sea region, which accounts for nearly one-third of global wheat exports. Big wheat importers, including in the Middle East, North Africa, and Asia, have instead turned to the EU, Australia, and India for replacement supplies. A poor outlook for the US hard red winter wheat crop, as Gro reported here, also will limit US supplies available for export. 

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