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Quick Take: March WASDE Update

Yesterday, the World Agricultural Outlook Board (WAOB) released its monthly World Agricultural Supply and Demand Estimates (WASDE), which stated in part that, “The midpoint for the projected corn price remains $3.60 per bushel.”

The report added that, “The U.S. season-average soybean price for 2015/16 is projected at $8.25 to $9.25 per bushel, down 5 cents at the midpoint.”

Jesse Newman reported yesterday at The Wall Street Journal Online that, “U.S. federal forecasters on Wednesday boosted their outlook for domestic soybean stockpiles while trimming estimates for global grain and soybean reserves.

“The Agriculture Department said in its monthly crop report that U.S. soybean inventories would reach 460 million bushels at the end of the 2015-16 season on Aug. 31, 10 million more than its February forecast and slightly above analysts’ expectations.

“‘Bigger picture, we’re swimming in corn, beans and wheat,’ said Doug Bergman, an analyst at investment firm RCM Asset Management in Chicago.”

Ms. Newman explained that, “​The muted reaction to Wednesday’s report comes as grain and oilseed prices have languished for months due to abundant global supplies, a robust U.S. dollar and stiff competition among exporters.

“While the report avoided piling on more bearish news, it didn’t provide much positive momentum for low crop prices that have pressured profits for farmers, seed companies and tractor makers, said Dan Cekander, president of market-research firm DC Analysis. The USDA in February projected U.S. farm incomes would fall to the lowest level since 2002 because of the continued slump in crop prices.”

University of Illinois agricultural economist Darrel Good also provided a brief recap of yesterday’s WASDE update: