The WASDE report from the United States Department of Agriculture (USDA) brought bad news to both the soybean and corn markets. The harvest is actually higher than originally thought, while it is still unclear how big the demand is.
It is not surprising that the soybean price on the CBoT in Chicago fell to $325 per tonne last weekend. This is because out of it WASDE report it turned out that the American stockpile is again enormous; there are still almost 25 million tons in storage. That is a more than double compared to the export volume in 2018.
In addition, the figures for a good harvest in South America were also presented; the USDA estimates the Brazilian soybean harvest at 116,5 million tons and the Argentinian harvest at about 55 million tons. To top it all off, it was announced that the USDA is neither increasing nor decreasing soy export expectations. It means it still is unclear is how exports to China proceed.
Corn price under pressure
Corn quotations on the CBoT also ended lower: $140 per tonne. The report expanded the US corn balance sheet, mainly because the ethanol consumption estimate was reduced by 0,6 million tons. In addition to the higher stocks, there will also be a larger Brazilian and Argentinian corn harvest; these are expected to be 94,5 million tons (82 million tons in 2018) and 46 million tons (32 million tons in 2018) respectively.
The USDA again lowered export expectations for U.S. wheat and increased ending inventories. The ministry does report improved exports from the European Union (EU), because the expectation has been increased by 1 million tons to 23 million tons. The USDA expects that the improved competitive position exports from the EU will improve for the remainder of this trading year.