WASDE preview: Steady corn seeks few changes, but Argentina key

Ahead of the USDA's April update to its WASDE, and against the backdrop of a deteriorating global trade environment, analyst expectations for the corn market broadly focus on South America, with a few modest - but already signposted - changes to the US picture. 

Domestically, having tweaked the US’s ethanol and feed numbers in March, it seems unlikely there’ll be any further tinkering at this stage, especially with concerns swirling around the RFS, but strong export sales raised some expectations.

That leaves the headline changes to fall to the core areas – US domestic corn stocks were already signalled in the USDA's stock and crop plantings reports that came out March 29, with most anticipating a substantial increase ahead, despite the drop in acreage.

Average trade estimates came in around 2.19 billion bushels, up from the 2.127 billion bushels in March.

The impact of higher US stock levels is likely to be redressed by an overall fall in global stocks, however, with China’s ongoing efforts to reduce its domestic levels, key in bringing levels further below the 200 million mt.

Estimates converged around 197 million mt – around 2 million mt below the March estimate.

South America still has weather woes to work through

With some in the trade now bracing for a sub-30 million mt Argentine corn crop, as lingering dryness further damages corn quality, the 36 million mt March estimate has been left on the high side as other market predictions have eroded around it.

As such, the industry is looking for a cut in April to 33-34 million mt, with some estimates anticipating a cut as low as 32 million mt to bring it in line with its contemporaries.

For Brazil, the pressure to tweak the 94.5 million mt estimate is less pronounced, with most expectations clustered around the 92-94 million mt level.