Shorter Feed Stocks Curb Enthusiasm
Much of the excitement that came in the agricultural futures markets on Thursday stemmed from the release of the USDA May world ag supply and demand estimates report or WASDE for short. While dairymen were likely pleased to see the USDA move to elevate the average prices projected for 2018 and 2019 milk production shortened feed supplies likely dampen that enthusiasm. The corn balance sheet shows ending stocks projection of 1.6 billion bushels down from the 2 billion plus that the market has become accustomed to. In recent years, this number is born out of a shortened acreage number as reported in the March planting intentions report of 88 million acres. A yield of 174, reduced feed usage, increased ethanol usage and expanded export projections. Soybean inventories are projected for the coming marketing year at 415 million bushels, again short of the 550 million that were expected and short of the 500 plus million in the 2017-18 balance sheet.
World ending stocks for corn has fallen to the lowest level in six years. Much of this comes on the heels of Chinese de-stocking which takes their ending stocks, which once were over 100 million metric tons, down to a projection of 60 million metric tons.
To add insult to injury Class IIImilk prices fell precipitously on Thursday at the hands of a lower cheese trade. Block cheese fell 3 3/4 cents to $1.66 1/2. Barrels remain unchanged, it finishes at $1.65.Grade A nonfat dry milk rose 2 cents, Butter fell 1/2 cent and whey rose 1/4 cent.