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Large supplies of US corn remain the theme in USDA’s monthly WASDE report. USDA’s US ending stocks of 2.17 billion bushels is unchanged from the February report and above the trade's expectation of 2.16 billion bushels. 

On the other hand, world numbers offer an image of tightening global output and stocks with reduced production, larger trade, and smaller ending stocks relative to last month. Foreign corn production is forecast lower, with declines for South Africa, Ukraine, Mexico, Venezuela and Russia. Those declines are partly offset by increases in Argentina and Syria. Argentina's corn output at 56.0 million metric tons is up from 55.0 last month, while Brazil’s output was left unchanged. World ending stocks were appraised at 319 million metric tons, below USDA's February estimate of 322 MMT. Futures pricing ultimately traded slightly higher, with nearby delivery hovering near $4.39 per bushel and new crop pricing holding around $4.70. 

USDA surprised the market with no surprises in its WASDE report. USDA left US soybean ending stocks unchanged from a month ago at 315 million bushels. 

The slow pace of US exports is keeping stocks elevated. World ending stocks are pegged at 114 million metric tons, below the February estimate of 116 MMT. Brazil’s production estimates were lowered by a million metric tons to 155.0 MMT despite local estimates calling for larger reductions. USDA left Argentina's soybean output unchanged at 50.0 MMT. Soybean futures did manage to cut early losses, turning positive following the report. 

Ethanol Economics: Production Dips but Stocks Rise, Surpassing USDA's Corn Usage Projections

Despite US ethanol production falling, stocks grew. For the week ending March 2, ethanol production totaled 1.057 million barrels per day, down 1.9% week-over-week and up 4.7% year-over-year. 

EIA estimated that 106 million bushels of corn were used in the production process, or 15.13 million bushels per day. That surpassed the 14.56 million bushels per day pace needed to reach USDA’s target. Stocks jumped slightly to 26.05 million barrels, within trade estimates and above year-ago stocks of 25.3 million barrels. USDA’s March WASDE estimate for corn usage for ethanol was left unchanged at 5.375 million bushels, below analysts’ expectations of a 25-million-bushel bump.   

Global Soybean Crush Adjusted: USDA's March WASDE Report Reflects a Slight Decline

US consumers favor butter. Domestic use was up 10% year-over-year in January according to USDA. However, with US prices running near the top of the global range the past few months, exports suffered, down 33%. Cheese didn’t fare quite as well, as domestic disappearance slid nearly 3% year-over-year. Exports picked up some of the slack with 84 million pounds shipped and volume up 13% compared to January 2023.

Cheese and whey markets both tumbled last week on notes of adequate supply and hesitant demand. Class III milk futures were dragged along on the ride lower, continuing to lose ground from February’s recent highs. Class IV butter remains elevated in the $2.75 to $2.85 per pound range as buyer anxiety in the build-up to Easter and Passover keeps the market supported. Nonfat dry milk continues to bounce in a narrow range around $1.20 per pound. Strong global supply and weaker demand are the culprits for the up-and-down movement. Market dynamics keep the spread between Class III and Class IV milk inverted by three to four dollars per hundredweight for months.

Industry players are losing some domestic processing capacity of fatty acid feed additives. Logistical bottlenecks and limited supplies may lift prices of fatty acid supplements soon. Don’t get caught unprepared – give us a call today. We have alternative solutions for nutritional supplements to boost milk yield and increase fertility. 

With the discontinuation of Church and Dwight's Megalac and Essentiom product lines, consider EnerGII by Virtus Nutrition as a reliable alternative for your dairy diets. EnerGII, a calcium salt manufactured in the US, offers the quality and consistency previously associated with Megalac.

EnerGII, with a balanced profile of 50% Palmitic and 35% Oleic, is proven to significantly improve ECM, feed efficiency, and total fatty acid digestibility.

This monthly report is brought to you by Ever.Ag’s Feed Foundations Team. The risk of loss trading commodity futures and options can be substantial. Investors should carefully consider the inherent risks in light of their financial condition. The information contained herein has been obtained from sources to be reliable, however, no independent verification has been made. By law we must state the information contained herein is strictly the opinion of its author and not necessarily of Ever.Ag and is intended to be a solicitation. Past performance is not indicative of future results.