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Shrinking world stocks should be friendly to U.S. corn, soybean prices

The USDA’s chief economist says a tighter global balance sheet should be friendly to grain prices.

In its latest World Agricultural Supply and Demand Estimates (WASDE), the Ag Department reduced South American corn production by nearly 6 million metric tons and soybeans by just over 6 million.

On soybeans, Warren Preston says a larger than anticipated Brazilian crop was more than offset by losses in Argentina and Uruguay.

“Tighter supplies will be beneficial to short-run price movements, and should be mostly favorable to the U.S.  Put us in a stronger export position.”

While the soybean export forecast for Argentina was reduced, USDA did increase expectations for Brazil.

Preston says Argentine corn production was trimmed 3 million metric tons with Brazil down 2 ½ million.

“So overall, we’re projecting world production down by 5.7 million metric tons.  That’s a drop of 39.4 million metric tons from the 2016-2017 crop year.”

The USDA lowered its South American corn export projections in Tuesday’s report.

 

*Audio courtesy of USDA*