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Feb WASDE Report Blurb

USDA in large part passed on making any major revisions to the February balance sheets, causing corn endings stocks to come in well above trade expectations at 1.502 bb vs the average trade guess of 1.392 bb. Selling pressure ensued post report, bringing March corn 29 cents off it’s intraday high at one point before recovering slightly ahead of the close. The only revision on corn came in the form of increased exports by 50 mb to 2.6 bb.

USDA sent a clear message that despite massive sales to China over the past few weeks and current sales on the books suggesting a final number closer to 2.8+ bb, they want to see shipment pace (which has generally been in line with the 2.55-2.6 #) pick up before making major adjustments on that front.

Regarding the soybean adjustments, USDA generally matched trade expectations by increasing exports 20 mb and dropping endings stocks down to an extremely tight 120 mb. Both the ending stocks level and the stocks/use level of 2.6% are record lows for the February report and will be the market’s job over the next 6 months to ensure that further US demand does not come to the table.

Any further spot sales out of the US due to the late Brazilian harvest would almost certainly have to reduce US crush or force bean imports into the US to compensate. On the South American side changes were essentially punted until the March report as well, with no adjustments to corn or soy production for either Brazil or Argentina.