The USDA made few changes to its domestic numbers in its March supply and demand report. Corn carryout was left unchanged at 801 million bushels, as was the figure on soybeans at 275 million bushels.

Trade had been expecting declines to both of these figures. The only decline in domestic ending stocks was to wheat, which was cut from 845 million to 825 million bushels, which is still an ample supply.

There were changes in the global production numbers, though, mainly in South America. The USDA projects Brazil’s soybean crop at 68.5 million metric tons (mmt), a 5 percent reduction from February. The Argentine soybean crop is projected at 46.5 mmt, down 3 percent from last month.

In a surprise move, the USDA increased Brazil’s corn crop to 62 mmt and left Argentina’s unchanged at 22 mmt, as both of these were projected to decrease. The USDA claims increased double-cropping will lead to the higher South American corn production.

Trade will now start looking forward to the March 30 grain inventory report. This will give trade a better estimate of actual grain usage this marketing year, especially for feed.

If feed grain demand follows historical patterns, we may have seen our greatest disappearance of the marketing year. If correct, this could easily offset any increase we may see to corn export demand.

Now that the calendar has turned to March, more interest will be placed on the upcoming planting and growing season. It would be surprising to see some early fieldwork taking place in the Southern Corn Belt by the end of this month. We may even see some further north, if soils remain dry and warm up quicker than normal.

We will also start to receive weather outlooks that will cover the majority of the growing season, and cause the addition or removal of risk premium.

Along with this, we will start to get a better idea of actual acres during the month of March. Recent polls indicate U.S. farmers will plant between 94 million-95 million acres of corn, and roughly 75 million acres of soybeans.

These numbers are similar to what the USDA released in its baseline estimates in mid-February. The first look at official numbers will come at the end of the month when the Prospective Plantings report is released.

There are differing opinions being released over the size of China’s corn crop this year. The USDA is projecting China’s corn production to increase by a large 14.5 mmt from last year, which is similar to what Chinese authorities are predicting.

Private sources in China claim corn production will only increase by 6 mmt, however. This lower number creates a void of 315 million bushels in the corn supply in China.

Another country being closely watched for corn needs and possible imports is Mexico. So far this marketing year, Mexico has already imported 7.7 mmt of corn. This is just under the 9 mmt corn import total for the marketing year being forecast by the USDA.

Mexico is receiving more attention from the fact it is now the United States’ second-largest corn importer, behind Japan.

Karl Setzer is a Commodity Trading Advisor/Market Analyst at MaxYield Cooperative. His commentary and market analysis is available daily on radio, in newsprint and on the Internet at www.MaxYieldCooperative.com

The opinions and views in this commentary are solely those of Karl Setzer. Data used for this commentary obtained from various sources believed to be accurate.

This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position.