Progressive Ag Marketing Report with Lilja
I heard a term this week that I hadn’t heard since my grandfather stated it. Bull flour. He told me that’s what you call the flour that comes from old bull powered mills where the bull walks around a large brick slab circle and grinds the grain. Being that I was under the age of 10, I took his word for it. Flash forward 40 years later to this week when I was reminded of the term from a friend who grew up on the Canadian border. He stated on social media that he can buy bull flour in the US now and that when he was younger, he thought the only place they could get it was Canada. Wikipedia did not even list the term. One of his friends clarified that bull flour is fine ground corn, wheat, rye, oats and rice especially treated and processed to be used as a binding agent in the making of sausage. Another one of his friends chimed in that there are many binders available and you don’t really need bull flour. You can substitute dry milk, powdered mustard or mix your existing flour longer and use less moisture. Yet another friend of his gave the links to a couple companies that supply bull flour and to no surprise they were located in Canada. After processing and eating as much deer sausage as I have throughout my life, I should have known more about this subject. But I did learn a couple things this week. #1 Those marketing guys were geniuses to market their flour product after bull powered mills. #2 - My grandfather was mostly full of “bull” from his old story about bull powered mills.
The surprise corn number on the February WASDE report came in the U.S. ending stocks. Traders were expecting the USDA to tighten the U.S. ending stocks by 16 million bushels, but they increased it by 10 mb. Traders were also expecting U.S. corn exports to slightly increase, but the USDA left them unchanged from last month’s report. In the February WASDE report the USDA lowered their estimates for Brazil’s corn crop by 3 MMT to 124 MMT. They also left Argentina’s corn crop unchanged at 55 MMT. The large cut to Brazil’s corn crop, leaving Argentina’s corn crop unchanged, and raising U.S. ending stocks resulted in slightly lower world corn ending stocks. Most of these numbers were on par with trade guesses, except for the increase in U.S. ending stocks.
The USDA lowered US soybean export demand 35 million bushels which raised US ending stocks 35 million bushels to 315 mb, and higher than estimates. The USDA keeps ignoring US crush which is above normal pace, but focuses only on export demand to adjust ending stocks. The USDA is considerably higher than most private South American estimates and even Brazil’s Conab. The USDA only lowered Brazil soybean estimates 1 MMT to 156 MMT, well above the trade average guess of 153 MMT and 6.5 MMT higher than Brazil state agency Conab’s estimate of 149.4 MMT. There was a large range of private estimates for Brazil soybeans (148 MMT – 157 MMT). The USDA was unchanged on Argentina production at 50 MMT compared to the average trade estimates of 50.8 MMT. Analysts were expecting Argentina’s soybean production to be up a bit compared to last month (50.9 MMT vs 50 MMT last month). Safras Mercado estimates Argentina’s 23/24 soybean crop at 49.6MMT, an increase of 2.2% vs previous estimate. The increase is due to favorable weather in the early season which allowed producers to plant 3% more acres to 17.2 million hectares.
The February monthly WASDE raised US 2023/24 wheat carryout 10 million bushels to 658 mb which was 9 million bushels higher than projections. Food usage was reduced 10 mb. World stocks decreased 0.6 from last month MMT to 259.4 MMT. Canadian all wheat stocks for December 31st were as expected at 20.7 MMT, down 10.3% from last year. Durum stocks were also as expected at 2.959 MMT, down 27.0% from last year. Conab estimates Brazil wheat production at 10.2 MMT which was a significant 26% increase from their last estimate.
Progressive Ag Marketing, Inc. and is, or is in the nature of, a solicitation. This material is not a research report prepared by Progressive Ag Marketing’s Research Department.
Tom Lilja is an employee of Progressive who writes this column for the Times-Record.