CBOT weekly outlook: Focus to shift after USDA’s largely stand-pat WASDE report

MarketsFarm — There was little change in U.S. markets shortly after the release of the latest supply and demand estimates from the U.S. Department of Agriculture (USDA).

But that scenario could change for wheat markets, said Steve Georgy, president of Allendale Inc. at McHenry, Ill.

“We’ve got to pay attention to how the wheat markets will close,” he stressed, noting wheat has rallied over the last few days. With that, he expects there to be profit-taking by early next week.

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As the harvest in southern Alberta presses on, a broker said that is one of the factors pulling feed prices lower in the region. Darcy Haley, vice-president of Ag Value Brokers in Lethbridge, added that lower cattle numbers in feedlots, plentiful amounts of grass for cattle to graze and a lacklustre export market also weighed on feed prices.

Georgy pointed to the increase in wheat ending stocks, which USDA bumped up from 836 million bushels in March to now 847 million. However, he also pointed to that carryover still being significantly lower than the 1.028 billion bushels in 2019-20.

With USDA’s latest world supply and demand estimates (WASDE) virtually in line with market expectations, Georgy said the trade will soon begin to look for something else to sink its proverbial teeth into.

“The focus of this report is going to shift really fast to how quickly we can get the (corn and soybean) crops into the ground,” he said, with that focus moving to USDA’s weekly crop progress reports.

“This was the last report that was strictly old-crop numbers. The May report is going to have… new-crop estimates,” he added.

The most notable difference between the March and April reports was the carryout for corn, which USDA lowered by 10 per cent at 1.352 billion bushels. That came in under the trade’s average guess of 1.396 billion bushels. Otherwise the data held from month to month.

Table: Estimates for crop ending stocks and exports, in millions of bushels, with March and 2019-20 numbers for comparison. Source: U.S. Department of Agriculture.

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