USDA WASDE Reactions | Blog
Teucrium | May 12, 2020
Grain markets remained firm in the wake of today’s WASDE report as the USDA revealed estimates of record global demand for corn, wheat and soybeans in 20/21. Global grain demand continues to grow even in the face of the COVID-19 pandemic.
In corn, higher use for feed offset some of the lost demand for ethanol. However, trend line yields and confirmation of 97 million acres planted, does little to change the corn balance sheet expectations, which appear to be largely priced in.
That said, going forward we may find that today’s corn production estimate may be the most optimistic of the year. Farmers who have not yet planted may choose to plant soybeans instead of corn. A shift of acres away from corn could contribute to future reductions in production estimates.
Grain production overall is, of course, largely dependent on weather. Adverse weather could also contribute to future downward revisions of production estimates.
The trade will be watching the weather closely as the growing season unfolds.
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