Market News & Headlines >> U.S. Soy Carry Seen Up Sharply in 2017/18

The grain trade will be focusing on USDA’s initial projections for the 2017/18 marketing year when the agency releases its monthly supply/demand report on Wednesday morning.

The focus should be primarily on demand estimates as Wednesday’s crop estimates should be based on the March 1 planting intentions and trend-line yields, which based on the preliminary projections USDA released at its annual Outlook Forum in February should be 170.7 bushels per acre for corn and 48.0 bushels per acre for soybeans. 

The 2017/18 U.S. soybean carryout estimate will likely bring the most interest from the trade due to the big jump in U.S. planting intentions to a record high and recent record Chinese imports. 

On average, expectations are for USDA to peg next year’s carryout at 563 million bushels, up 26.5% from USDA’s current estimate for the 2016/17 carryout, according to a Reuters News Service survey of 18 analysts. Trade estimates range from 420-759 million bushels. Trade estimates of the 2016/17 soybean carryout average 439 million bushels versus USDA’s April estimate of 445 million. 

Trade estimates of the 2017/18 U.S. corn carryout average 2.122 billion bushels in a range from 1.835-2.400 billion bushels compared with USDA’s current 2016-17 carryout estimate of 2.320 billion bushels. Expectations are for lower corn seedings and production to be partly offset by a drop in U.S. exports due to the large jump in South American corn production for 2017/18. Trade estimates of the 2016/17 U.S. corn carryout average 2.326 billion bushels. 

With U.S. winter wheat seedings for 2017 harvest down sharply, pre-report expectations for the 2017/18 U.S. wheat carryout average 934 million bushels, 19.4% below USDA’s current forecast for a 2016/17 carryout of 1.159 billion bushels. Trade estimates range from 842 million to 1.000 billion bushels. Trade estimates of the 2016/17 U.S. wheat carryout average 1.162 billion bushels.