Reuters Quarterly Stocks Poll Shows More Wheat & Soy, Less Corn

Reuters March 1 Quarterly Stocks Poll: More Wheat & Soy, Less Corn

A Reuters poll of 30 grain analysts showed year-on-year increases for wheat and soybean stocks and a slight decline for corn.

The average for estimates of corn is at 8.335 BBU, which would be the third-largest on record for March 1 but the first year-on-year stocks decline in six years.

For soybeans, the average estimate is at 2.683 BBU, which would represent the fifth straight year of larger year-on-year stocks and the biggest March 1 stocks on record.

For wheat, the average estimate is at 1.555 BBU, which would be the second-largest March 1 stocks in the past 30 years but just the 11th largest on record.

What It Means for the U.S. Farmer:From the surface, the Reuters poll is not good for the U.S. farmer as the estimates illustrates and reinforces a sluggish demand story. The initial estimates do not give the markets too much to be bullish about. The soybean stocks number should not be a surprise as the lack of export business continues to weigh on futures and cash prices. The corn number is fundamentally uninspiring as the 2017/18 carry-in and production were larger than 2018/19. The wheat numbers are bearish and represent a lack of export business and feeding. If the actual USDA numbers are close to the estimates, expect adjustments in the April WASDE.

Egypt’s GASC Imports 120,000MT of SRW

Egypt's state grains buyer, the General Authority for Supply Commodities (GASC) bought 120,000 tonnes of U.S. soft red wheat in an international purchase tender on Tuesday.

Egypt had been absent from the wheat market since its last tender on Feb. 20. It said on Monday it would go back to securing letters of credit within 180 days instead of immediate payment.

Apparently the change in payment terms increased prices by at least $4-$4.5 per tonne.

Other origins that Egypt bought wheat from included: Romania, Russia and the Ukraine.

What It Means for the U.S. Farmer:A good “win” for the SRW and the U.S. wheat complex. The SRW offers seems to reinforce the notion that low prices can help buy demand in the global export market. However, this SRW “win” can represent a downside for HRW. While HRW is a different class of wheat, the GASC SRW business can help keep the intermarket spread favoring SRW over HRW.

The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

—Kevin McNew