Market Comment
The USDA will issue its April S&D today at 10 AM Mountain time. Given the March inventory of corn, we already know feed use this past winter was stronger than USDA expected. We already know from weekly numbers that the corn for ethanol crush and corn exports are running stronger than USDA projected for the year. But will USDA reduce the corn carryover below 2 billion bushels, as they should, based on the numbers we already know? Probably not.
Â
The average estimates are that USDA will reduce Brazil’s corn crop by 2.25 mil mts and the bean crop by 3.32 mil mts. While we agree that should happen, we doubt USDA will see it that way.    Â
Â
From our client, Brian, in Iowa yesterday afternoon:
"Had a meeting with a chemical company last week. One of the agronomists was a younger guy from Brazil. He was talking about the crops there, explaining the drought was way worse than USDA or Conab are reporting and covered a huge area. He was talking about crops being less than half of normal in a very, very large area from north to south with Mato Grosso being the worst. He also said that since a large percentage of farmers there do business by bartering their crops for inputs that they could not get inputs for safrina corn due to low soybean yields. A large area was growing oats to make payments for their deficit in soybeans because that was all they could get inputs for."
Â
Thanks, Brian. Brazil's growers’ association has been saying the same thing for three months and that the bean crop is ~135 million mts, 20 million less than USDA.