As expected, very few changes took place to the U.S. balance sheets in the April World Agricultural Supply and Demand Estimates.

The bigger adjustments that we saw to April balance sheets were in the domestic corn complex. The U.S. corn carryout was trimmed 75 million bu to total 1.465 billion bu while a steady number was expected. Feed and residual demand was cut 25 mbu this month, which was more than offset by a 100 mbu increase to projected exports. The average cash corn estimate was left unchanged this month at $4.35 per bushel.

U.S. soybean carryout was expected to hold steady this month, but the USDA trimmed its number by 5 mbu to total 375 mbu. Soybean crush was bumped up by 10 mbu this month but this was partially offset by slightly higher imports. While this is not a significant change, the soy complex is already at a rationing level, and any cut to stocks is supportive. That said, the USDA stated they are monitoring U.S. trade relations as these will have an impact on both soy and soy product exports, and imports, for the foreseeable future. The USDA left its cash soybean projection unchanged at $9.95 per bushel.

Only minimal changes were made to domestic wheat balance sheets this month as well, but they were still seen as negative. The USDA trimmed its wheat demand forecast by 27 mbu this month, with seed usage and exports both being lowered. This took the U.S. wheat carryout to 846 mbu, a 22 percent increase from last year. The USDA also left its cash wheat projection unchanged this month at $5.50 per bushel.

Even fewer changes took place to the global balance sheets. The world corn carryout is now forecast at 287.65 million metric tons, down 1.3 mmt from last month. Global soybean carryout is projected at 122.47 mmt, just above last month’s 121.4 mmt. World wheat ending stocks are estimated at 260.7 mmt compared to 206.08 mmt in March.

A number that was lost in all this data was China’s corn import forecast. Officials in China believe the country will import 7 million metric tons of corn in the 2024/25 marketing year. This compares to 9 mmt in the prior year. Another record domestic crop and ample feed wheat supplies are forecast to cut China’s corn imports, but so are more efficient corn processing in the country, including streamlined livestock production. China currently has no U.S. corn booked going forward and it is unlikely they will with this reduction.

The USDA made a slight 10-million-pound increase to the U.S. beef production forecast, putting it at 26.7 billion pounds. The USDA cut its beef export forecast by 135 million pounds due to current global trade issues, taking them to 2.685 billion pounds. Beef imports were also lowered 150 million pounds, putting them at 4.86 billion pounds. The average steer value was increased by $6.01, putting it at $205.51 per hundredweight.

Pork production was cut a large 350 million pounds this month, putting it at 28.08 billion pounds. Pork exports were also cut by 265 million pounds, taking them down to 6.96 billion pounds. The average hog value was lowered to $61.14 per cwt this month, down $1.61.

One of the biggest takeaways from this report was the USDA stating it is monitoring global trade relations and will adjust demand outlooks accordingly. This can be both good and bad, as we may see fewer soybean exports this year for example, but also lower imports of competing products such as used cooking oil for renewable fuel production. This is only adding to market uncertainty and elevating volatility.

Prior to these numbers being released, the Brazilian firm CONAB released its supply and demand forecast. CONAB now has the Brazilian soybean crop at 167.9 mmt, up 600,000 mt from last month. The group’s corn crop estimate is for 124.7 mmt, up a large 2 mmt from its prior estimate. Improved weather and elevated plantings are behind the larger production forecasts.

Even though the U.S. planting season is underway we are seeing ongoing debate over potential acreage. This comes from the new crop corn and soybean price ratio that has become more volatile. In recent weeks we started to see soybean values firm though, and this spread narrowed to 2.3:1 as the soy complex pushed for uncommitted acres. The escalation in trade issues between the U.S. and China has some analysts dropping their new crop soybean demand outlooks though, and in turn, reducing their expected soybean needs. The new crop ratio has narrowed to 2.2:1 and again favors corn production. This shift is not from a push for corn but rather from concerns the U.S. may lose soybean demand.

Hopes for a build in renewable fuel demand continue to provide support to the soy complex. The current U.S. biodiesel demand stands at 3.35 billion gallons per year, but industry officials are recommending the blend rate be raised to 5.25 billion gallons. Renewable fuel supporters are also asking for the total U.S. renewable fuel mandate to be raised to 25 billion gallons from the current 22.3 billion gallons. Such an increase in production would have a significant impact on U.S. soybean balance sheets that are already at a minimal level.

RISK DISCLAIMER: The risk of loss in trading commodity futures and options is substantial. Before trading, you should carefully consider your financial position to determine if futures trading is appropriate. When trading futures and/or options, it is possible to lose more than the full value of your account. All funds committed should be risk capital. Past performance is not necessarily indicative of future results. The information contained in this report is collected from a variety of sources and is believed to be reliable but is not guaranteed to be accurate. This report is provided for informational purposes only and is not furnished for the purpose of, nor is it intended to be relied upon for specific trading in commodities herein named.