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USDA Reports Preview          04/08 06:03

   April WASDE Braces for Demand Reductions

   As coronavirus deaths continue to rapidly rise in the U.S. and economic 
activity is at a standstill, USDA is likely to issue lower demand estimates for 
corn, soybeans and possibly wheat in Thursday's WASDE report, due out at 11 
a.m. CDT. Tune into Thursday's post-report webinar for our thoughts, as well as 
spring weather comments from DTN Senior Ag Meteorologist Bryce Anderson.

By Todd Hultman
DTN Lead Analyst

   Fresh off USDA's March 31 report of March 1 grain stocks, USDA will 
incorporate the latest stocks estimates into the April World Agricultural 
Supply and Demand Estimates (WASDE) report. This particular report is usually a 
low-key affair, but in the era of coronavirus, a surprise may be in store. 
Thursday's numbers are likely to show some influence from the anticipation of 
lower grain demand ahead. 


   Like it or not (and most of us will vote not), the spread of coronavirus and 
efforts to slow the spread have dominated ag markets for over a month. For corn 
prices, the effect has been especially bearish. Coming off USDA's 
lower-than-expected March 1 corn stocks total of 7.953 billion bushels (bb), we 
would normally expect to see higher demand estimates in the April WASDE report.

   This year, however, that bullish adjustment will likely be outweighed by two 
bearish demand adjustments -- one for exports and one for ethanol. U.S. export 
commitments for corn are currently down 26% from a year ago and are slowly 
improving but will struggle to reach USDA's export estimate of 1.725 bb. 
Ethanol production dropped 19% the past two weeks, a consequence of Saudi 
Arabia's oil price war at a time when the coronavirus has us all driving less.

   Dow Jones' survey of analysts expects USDA to increase the estimate of U.S. 
ending corn stocks from 1.892 bb to 1.990 bb, a modest increase that has 
potential to go higher Thursday, depending on how aggressive USDA wants to be 
about its demand reductions.

   Beyond the U.S., Dow Jones' survey expects world ending corn stocks to be 
increased slightly, from 297.3 million metric tons (mmt) to 298.5 mmt (11.75 
bb). A slightly lower crop estimate of 100.3 mmt (3.94 bb) is expected for 
Brazil, and a slightly lower estimate of 49.7 mmt (1.96 bb) is expected for 

   If you have been wondering when USDA might release its new survey of corn 
and soybean production in Northern states, National Agricultural Statistics 
Service (NASS) announced on April 7 that the survey will be conducted later in 
April and will be released in the May Crop Production report, if the numbers 
differ from the January NASS estimates. Because harvest in North Dakota needs 
more time, the survey for North Dakota will be conducted at a later date.


   For soybeans, the 2.253 bb of supplies USDA found on hand for March 1 was 
slightly higher than expected and shouldn't have much effect on Thursday's new 
demand estimates. 

   However, Dow Jones' pre-report survey does expect USDA to increase its 
estimate of U.S. ending soybean stocks, from 425 mb to 444 mb. The increase 
will likely be pinned on the sluggish pace of soybean export sales. As of March 
26, U.S. soybean export commitments were down 15% in 2019-20 from a year ago, 
well below pace from the 4% increase USDA is currently projecting. 

   For USDA's world estimates, Dow Jones' survey expects soybean stocks to be 
lowered slightly, from 102.4 mmt to 101.9 mmt (3.74 bb). The crop estimate for 
Brazil is expected to be trimmed from 126.0 mmt to 124.2 mmt (4.56 bb). 
Argentina's crop estimate is expected to come down from 54.0 mmt to 52.7 mmt 
(1.94 bb) -- both due to recent stretches of drier weather.


   Similar to corn, U.S. wheat stocks on March 1 were a little less than 
expected at 1.412 bb and give Thursday's demand estimates the right to a slight 
bullish adjustment. Exports, however, are not quite up to pace for reaching 
USDA's 1.000 bb export estimate and may be lowered Thursday. 

   Dow Jones' survey expects USDA to slightly increase its estimate of U.S. 
ending wheat stocks for 2019-20 from 940 mb 945 mb. If true, the small change 
is not likely to have much price impact.

   USDA's estimate of world ending wheat stocks is expected to be tweaked 
slightly lower, to 287.0 mmt (10.55 bb) for 2019-20, but the market is more 
interested in new-crop estimates these days, something USDA won't provide until 
the May WASDE report. 

   In general, April WASDE reports don't typically show much price movement as 
May corn prices have held within a 2 1/2 cent change after four of the past 
five April reports. This year, though, has already proved itself to be unusual, 
and surprises are possible.  


   Join us for a post-report webinar at noon CDT on Thursday, April 9. After 
discussing USDA's latest estimates, DTN's Senior Ag Meteorologist Bryce 
Anderson will offer his latest comments concerning spring weather. Register now 

WORLD PRODUCTION (million metric tons) 2019-20
                     Apr       Avg      High       Low       Mar       2018-19
        Argentina             49.7      51.7      49.0      50.0          51.0
           Brazil            100.3     101.1      99.0     101.0         101.0
        Argentina             52.7      54.0      51.0      54.0          55.3
           Brazil            124.2     126.0     123.0     126.0         117.0
U.S. ENDING STOCKS (Million Bushels) 2019-20
                     Apr       Avg      High       Low       Mar       2018-19
Corn                         1,990     2,150     1,790     1,892         2,221
Soybeans                       444       504       400       425           909
Wheat                          945       999       910       940         1,080
WORLD ENDING STOCKS (million metric tons) 2019-20
                     Apr       Avg      High       Low       Mar       2018-19
Corn                         298.5     301.0     293.0     297.3         320.8
Soybeans                     101.9     104.9      98.5     102.4         111.9
Wheat                        287.0     291.0     283.9     287.1         277.6

   Todd Hultman can be reached at

   Follow Todd Hultman on Twitter @ToddHultman1


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