In a somewhat surprising move, the USDA left carryout estimates on corn, soybeans and wheat unchanged from last month in the March WASDE report. This kept ending stocks at 1.502 billion bu on corn, 120 million bu (mbu) on soybeans and 836 mbu on wheat. The only change to balance sheets was a 1 mbu increase in soybean seed demand which was offset by a 1 mbu decrease in residual usage. The average cash values were also left unchanged at $4.30 on corn, $11.15 on soybeans and $5 on wheat.

We did see slight changes to the global balance sheets, but surprisingly, they were upward on corn and soybeans and down on wheat. World corn ending stocks are now estimated at 287.7 million metric tons (mmt) compared to 286.5 mmt last month. Soybean ending stocks are now projected at 83.7 mmt, a slight increase from 83.4 mmt in February. The global wheat ending stocks are now forecast at 301.2 mmt, down from 304.2 mmt a month ago.

The main reason for these changes was from South America. Despite recent weather issues, the USDA increased its Brazilian soybean crop by 1 mmt to a total of 134 mmt. Brazil’s corn crop was left unchanged at 109 mmt. The USDA is projecting 47.5 mmt crops of both corn and soybeans in Argentina. This is an unchanged number on the corn crop, but a 500,000 metric ton decrease to soybeans.

Of all the data that was released, the most interest was on global wheat balance sheets. The global wheat crop is estimated at a record 776.8 mmt this year, but world demand is forecast to rise as well. The biggest increase is coming from Chinese wheat feeding as that grain is edging out corn as a base. Not only is this from availability, but also from its higher protein content than corn which makes it an easy substitute. When it comes to the global wheat supply it is interesting to note that China is holding 50 percent of the world supply.

The Brazilian soybean harvest is starting to advance after a slow start, and as it does, so do soybean exports. Brazil exported an estimated 5 million metric tons (mmt) of soybeans in February. While this was under initial expectations, it was still a sizable volume for the month. In March, Brazil is anticipated to ship out a large 15 mmt. The combination of these two is 128 percent of the volume of soybeans Brazil exported to start the previous export program.

The question now is how long Brazil may remain a soybean exporter. It is currently believed Brazil will remain the world’s leading soybean supplier through June. Last year, Brazilian officials exported long after it was thought they would run out, but in doing so, exhausted its soybean reserves. While Brazil may be more reserved in its exports this year, it will likely depend upon what value it can make imports for if needed.

Trade is also monitoring Brazil’s corn export program. According to Brazilian figures the country exported more corn than the USDA predicted for the 2020/21 marketing year. There are now thoughts Brazil is sitting on just 4.2 mmt of corn inventory which is a minimal 15-day supply. This will remove Brazil from the corn export market until the Safrinha crop is ready which will be in August. This opens the door for elevated U.S. exports, but also for Argentine sales, which are currently being offered at a sizable discount to U.S. corn.

The United States continues to export a large volume of pork. For the calendar year the United States has already exported 148,600 metric tons of pork. This is a record pace and 13 percent ahead of last year, which was the previous record. It is no surprise the China is a primary buyer of U.S. pork but is being followed closely by Japan and Mexico. China is starting to rebuild its domestic hog herd though, which may weigh on sales as the year progresses.

The La Nina weather event continues to cause disruptions in global commodity production. The most talked about of these remains the drought in South America and also in the Southern United States. An area that is getting more attention is what the La Nina may mean for Australian wheat output. Unlike other regions of the world, a La Nina tends to lead to elevated wheat production in Australia such as we had this year. It is believed that without this weather event Australia’s wheat production could be down as much as 25 percent this coming year.

The La Nina is also having an impact on the United States, mainly in the Plains and Southern States. Drought has developed in these states causing a depletion of soil moisture. This has combined with the February cold snap to cause damage in the wheat crop in that region, and now there are reports some fields will likely shift to alternative crops. While it is unlikely this will be a significant volume of acres, thoughts are it may add production to either corn or soybeans.

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