USDA Adjusts Domestic Corn Ending Stocks.

U.S. and global stock numbers were tweaked slightly by the U.S. Department of Agriculture. On Tuesday, USDA released the U.S. ending stocks report and the World Agricultural Supply and Demand Estimate report.

After the record came out, Leslie Smith interviewed Tom Leffler of Leffler Commodities.  Leffler said there were no big surprises, as the numbers came in close to trade estimates.

The U.S. corn ending stocks came in at 1.777 billion bushels. Leffler said this was lower than what the trade was expecting and 50 million bushels lower than the February estimate and down 100 million from the January estimate. U.S. soybean ending stocks came in at 385 million bushels. Leffler said this was higher than what the traded expected, it was unchanged over February’s estimate and 25 million lower than the January estimate. U. S. wheat ending stocks was estimated at 691 million bushels. Leffler said this was lower than what the trade expected and one million bushels lower than February’s estimate, but four million bushels higher than the January report. In going back to the January estimate, Leffler said corn, wheat and soybeans prices are all trading lower, as there isn’t a lot of changes in U.S. stock numbers.

The amount of corn necessary to make a gallon of ethanol is less than previously believed according to USDA. In lowering the projected demand by the ethanol market for U.S. corn by 50 million bushels, the agency cited "a higher rate of conversion than previously assumed" as the reasoning for the adjustment. The information upon which this analysis was based came from the National Agricultural Statistics Service's new Grain Crushings and Co-Products Production report.

"What is most remarkable about this supply and demand report is the light it sheds on a topic of great concern to U.S. corn farmers- recognition of the growing efficiencies in the ethanol industry," said NCGA President Chip Bowling, a Maryland corn farmer. "For many years, we have strongly asserted that the ethanol industry continues to improve and those productivity gains should be taken into consideration. With the simple justification offered for the analysis, USDA made a great step forward in showing its growing appreciation for the advances made in ethanol production and, thus, the ever-increasing benefit it offers Americans."

While USDA estimates for corn use in ethanol production were lowered by 50 million bushels, the overall drop was partially offset by higher than expected production over the winter months. The demand decline was more than offset by projected increases in demand for corn from the export and feed and residuals markets of 50 million bushels each.

Projected ending stocks were lowered by 50 million bushels in light of the other adjustments. Average farm price estimates were raised by five cents at the midpoint to $3.50 to $3.90 per bushel.

USDA also released the March WASDE report on global production. Leffler said there was only one major change that stood out with USDA lowering the world corn stocks by 4.36 million metric ton. He said USDA lowered South American corn production by two million metric ton and they revised the domestic South African corn consumption for 2005 - 2010 crop years. World wheat stocks were decreased by 14 thousand metric tons, a small decrease. Leffler said there was a small increase in the world soybean stocks by 27,000 metric ton. Leffler said soybean production for Argentina and Brazil was left unchanged over last month with Argentina at 56 million metric tons and Brazil at 94.5 million metric tons.