Chicago Board of Trade Market News
Outlook: The March WASDE was released on Tuesday and it seemed to surprise some individuals in the market by reducing U.S. corn ending stocks for a fifth consecutive month, to 1.777 billion bushels. This additional 50 million bushel decline from the February estimate of 1.827 billion bushels reduced the stock-to-use ratio to 13 percent.
The 50 million bushel decrease in U.S. corn ending stocks for the current 2014/15 season was the result of an increase in the estimate for export sales. U.S. domestic demand was unchanged as a reduction in ethanol was offset by an increase in feed use. The result was another modest increase higher to the estimated U.S. farm prices of corn, projected to range from $3.50 to $3.90 per bushel for the current season.
Favorable prices for buyers have also created better-than-expected demand for both sorghum and barley. That consistent demand has resulted in the estimated price of sorghum increasing by 10 cents to a new trading range of $3.70 to $4.10 per bushel, even though the ending stocks for U.S. sorghum remains unchanged. Barley prices were also increased by 10 cents to a new projected range of $5.20 to $5.50 per bushel.
World demand for coarse grains is strong and the estimate for global consumption was increased by 2.7 MMT. At the same time, the estimate for global coarse grain production was reduced by 1.6 MMT. The composite of changing supply and demand factors resulted in global coarse grain ending stocks for the present 2014/15 season being reduced by 5 MMT, with 4.4 MMT of that production resulting from lower corn stocks. The outlook is that the existing solid global demand for coarse grains could further increase if market participants become increasingly concerned about production prospects for the approaching 2015/16 season.