Headlines:

  • Cotton futures briefly slump on big world stocks
    Cotton futures briefly tumbled, after the US Department of Agriculture raised its outlook for global production and inventories by the end of the 2016-17 crop year. The USDA trimmed its ideas of US 2016-17 cotton closing stocks by 300,000 bales, to 4.50m bales, thanks to stronger exports, as was expected. But the bureau struck a downbeat tone for price prospects. “Greater supplies outside of China are expected to pressure cotton prices in 2017-18,” the USDA said. “Hence, the price received by US farmers could fall within the range of 60-70 cents per pound, compared with the current 2016-17 forecast of 68.5 cents.”
  • Perdue Nomination for USDA Secretary Turns Cloudy
    President Trump’s nominee for agriculture secretary, Sonny Perdue, was “mired in ethical lapses” while governor of Georgia “that raise troubling questions about his fitness to run the department,” said the Environmental Working Group. Neither Perdue nor leaders of the Senate Agriculture Committee, which would hold a confirmation hearing on Perdue once a background check is completed, were immediately available for comment.

Summary:

The USDA raised its 2016-17 domestic Soybean ending stocks estimates, tightened the balance sheet for Wheat and left Corn unchanged in its supply and demand report today. Soybean ending stocks were up 15 million bushels from February at 435 million with a reduced export projection. Wheat ending stocks were reduced by 10 million bushels to 1.129 billion along with an import estimate that dropped by 10 million bushels. Corn held steady at 2.320 billion bushels with larger ethanol use estimate offsetting a lower feed use projection. The USDA’s prospective planting and quarterly stocks reports are scheduled for March 31st and the next set of supply and demand numbers scheduled for April 11th.

The real story today may fall at the hands of the USDA’s increased Corn and Soybean production estimates for Brazil. Weather has been a problem for some time now for growing conditions during the South American growing season but its seems that it has not been bad enough to disrupt the projected record production. The USDA projected Brazil’s Soybean crop at a record 108 million tons and the Corn crop at 91.5 million tons. Both of these projections are larger than what Brazil’s CONAB has forecasted. The USDA also increased Brazil’s Soybean export estimates by 1.5 million tons to 61 million. Additionally they reduced the US export estimates. They also raised China’s import projection by 1 million tons to 87 million. It is perhaps this combination of factors that has worried investors most about Soybean price stability.

May Beans were down double digits today surrendering 10.75. July Wheat only lost 2.00 and May Corn fell 5.25.