The Biden administration has announced it will temporarily lift the suspension of E-15 sales in summer months. At the present time, E-15 sales are suspended from June 1st to September 15th, as the higher blend rate is a reported cause of elevated smog in high air temperatures. There are hopes this move will become permanent and not only increase ethanol demand but lower fuel costs for U.S. consumers. Data indicates this will also increase U.S. corn demand by 25 to 45 million bu.

The corn side of the April balance sheets contained few changes from March. Feed and residual demand on corn was lowered by 25 million bu (mbu), but an equal increase was made to ethanol consumption. This left the U.S. corn carryout estimate at 1.44 billion bu (bbu), which is a 9.6 percent stocks-to-use ratio. The average cash corn price projection did increase 15 cents to $5.80 per bushel.

Even fewer changes were made to the U.S. soybean balance sheets. The USDA bumped its export forecast up by 25 mbu, which was the only alteration to demand. This was still enough to drop the carryout estimate to 260 mbu, which is a stocks-to-use of 5.8 percent. Even with this decline the average cash value on soybeans was unchanged from last month at $13.25 per bushel.

The most changes to domestic balance sheets were on wheat. The USDA lowered wheat exports by 15 mbu and feed demand by 10 mbu. This was enough to increase ending stocks to 678 mbu, which is a stock- to-use of 35.5 percent. Even with this larger ending stocks estimate, the average cash wheat value was bumped 10 cents higher to $7.60 per bushel as global market strength is forecast to benefit the US market.

The global side of the report was mixed on ending stocks. World corn carryout increased 4.5 million metric tons (mmt), mainly from a larger Brazilian crop to total 305.5 mmt. Soybean ending stocks were trimmed 400,000 metric tons due to a smaller Brazil production figure but above the average trade guess at 89.6 mmt. The world wheat carryout was lowered 3.1 mmt to a 278.4 mmt total, which was 3 mmt less than the average estimate.

The USDA adjusted the Brazilian and Paraguay crop estimtes but left Argentine production unchanged. Brazil corn production was increased by 2 mmt for a 116 mmt total. Brazil’s soybean crop estimate was reduced by 2 mmt for a 125 mmt crop. This soybean production figure remains at the top end of most expectations.

The Argentine crops are projected at 43.5 mmt on soybeans and 53 mbu for corn. The USDA did lower the Paraguay crop estimate by 1.1 mmt from last month.

U.S. beef and pork balance sheets had mixed data. U.S. beef production this year is forecast at 27.71 billion pounds, a 140-million pound increase from March. U.S. beef exports were left unchanged at 3.3 billion pounds, even though we have seen record exports to start the marketing year. U.S. pork production was lowered by 240 million pounds to a 27.08-billion pound total. Pork exports were lowered and are forecast at 6.6 billion pounds. Average prices are now projected at $139.31 per hundredweight on steers and $72.89 per hundredweight on hogs.

Despite logistic and labor issues, Brazilian new crop soybean exports are a record high. Cumulative Brazilian soybean exports currently total 596 million bu (mbu) compared to last year’s 509 mbu at this time. A faster harvest pace is the primary cause of this high export volume as last year’s harvest was heavily delayed by rains. The question now is how long Brazil’s soybean inventory will last with most analysts claiming the bulk of exports will be exhausted by mid-summer. What may be more important for the United States is how much supply buyers will need at that time ahead of the U.S. harvest.

We are starting to see several of the world’s leading commodity importers adjust or totally remove their tariffs on purchases. This is mostly on grains and is a result of buyers realizing it may be several months before Black Sea exports return to the market, and possibly another year. One of the most noted of these is the European Union, which has removed its taxes on corn for feed imports. Brazil has also removed its import charges on wheat and will suspend the tariff on ethanol imports through the end of the year.

World food values continue to rise even though they are already record high. According to numbers from the United Nations’ Food and Agriculture Organization, food values increased in March 12.6 percent from February. This put world food values at the highest level since 1990 when data started to be tracked. Much of the increase was from a 17.1 percent increase in grain values due to the Ukrainian war. A 23.2 percent increase in vegetable oils due to the shrinking South American soybean crop was also a factor in the elevated world food costs.

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