The grain market bulls had their horns clipped by the US Department of Agriculture (USDA) last week, when its February global supply and demand update failed to deliver the supportive news many had expected.
There were few production surprises, but the World Agricultural Supply and Demand Estimates (WASDE) report raised more questions than it answered on the demand and stocks side of the equation.
The USDA increased world production forecasts for corn, soybeans and wheat, which was broadly in line with market expectations.
But global demand estimates were lower for corn - which was a surprise considering the China appetite - unchanged for soybeans and dramatically higher for wheat.
All this led to tighter ending stocks for soybeans and wheat, but corn stocks defied expectations by posting an increased closing number.
World corn production was increased slightly to 1134.05 million tonnes.
It was unsurprising to see no change in this report to Brazil and Argentina's forecasts of 109 million tonnes and 47.5 million tonnes, respectively.
Nonetheless, there are still production concerns about dryness in parts of Argentina and delays to the planting of Brazil's safrinha crop.
Global corn demand was decreased by 2.54 million tonnes to 1,150.52 million tonnes and, compared to the January report, the exports forecast was up by 2 million tonnes to 185.7 million tonnes.
Ending stocks are estimated to increase by 2.7 million tonnes to 286.53 million tonnes.
The corn matrix is all about Chinese demand at present.
The USDA has been slow to react. But it finally bit the bullet by adding 6.5 million tonnes to its January forecast.
This took corn imports to a record 24 million tonnes, which better reflects Beijing's recent buying spree.
It would be logical to think that US exports would reflect that same market activity.
But that would be wrong.
The USDA rearranged the furniture somewhat by decreasing demand in the European Union, South Korea, Japan, Turkey and Saudi Arabia, leading to an increase in US exports of only 1.27 million tonnes. Go figure.
China's domestic feed consumption of corn was raised by 6 million tonnes, which made total sense.
But the USDA reduced corn used for food, seed and industrial purposes by 4 million tonnes.
This meant 4.5 million tonnes of the additional imports went to ending stocks, which increased month-on-month to 196.18 million tonnes. This was just 4.35 million tonnes lower than 2019-20 closing stocks.
The USDA avoided the hard decisions by leaving China's opening stocks and production unchanged.
Yet several factors point to much lower inventories.
Beijing suspended the country's ethanol blending target in early 2020, citing low corn stocks.
China sold 56.84 million tonnes of corn from state reserves in 15 auctions from May to September last year. But the USDA's stock estimates have failed to reflect the domestic market activity.
There are also serious question marks about the corn production numbers being posted by the Chinese authorities - and adopted by the USDA - after flooding and severe lodging devastated large tracts of the country's major corn producing regions last year.
And why would China need to import more than three times as much corn in the current marketing year as they did in the 2019-20 season, with a stocks-to-use ratio of 68 per cent?
The USDA made very few changes on the soybean front.
But the balance sheet is already tight, particularly in the US.
Global soybean production estimates were unchanged at 361 million tonnes.
The main contributors were Brazil at 133 million tonnes, Argentina at 48 million tonnes and the US at 112.55 million tonnes.
Collectively these countries make up 81 per cent of global production, which emphasises the vulnerability of the global balance sheet to production hiccups in those jurisdictions.
Overall demand was steady at 369.84 million tonnes and worldwide exports were increased by 0.6 million tonnes to 169.69 million tonnes.
Almost all of this increase was out of the US, where the forecast ending stocks fell to just 3.25 million tonnes.
That has the US running on the smell of an oily rag leading up to its harvest, yet sales and export data suggest US exports should be higher.
It is looking increasingly likely that the US will require imports from South America to bridge the supply gap.
Worldwide ending stocks were down almost 1 million tonnes to 83.36 million tonnes, which equates to a fall of 11.5 million tonnes - or 11 per cent - compared to the 2019-20 season. it is also down a staggering 29.5 million tonnes - or 26 per cent - compared to the 2018-19 season.
China remains the front-page soybean story.
Its demand in the 2020-21 season is unchanged at 100 million tonnes - or 59 per cent of global exports.
But many in the trade believe that it will be higher come season end if the current pace of purchases is maintained.
The major export suppliers continue to be the US and Brazil, with 61.24 million tonnes and 85 million tonnes forecast to be shipped respectively in the current marketing year.
That is more than 86 per cent of total global trade.
The USDA pegged global wheat production at a record 773.44 million tonnes, which is an increase of 0.8 million tonnes from its January estimate.
It called Kazakhstan wheat production 14.26 million tonnes, which was up 1.76 million tonnes from the last month and 2.81 million tonnes higher than in 2019-20.
Pakistan output was down by 0.5 million tonnes and the Argentine crop was reduced by 0.3 million tonnes.
Still, the USDA continues to ignore the enormous crop just harvested here in Australia - leaving production estimates unchanged at 30 million tonnes.
We know it is all about the end game for the USDA when it comes to Australian estimates.
But the bulk of harvest finished two months ago, and its number is still 5 million tonnes shy of reality.
The big change in wheat was a 9.8 million tonnes hike in world demand.
Indian consumption was up 3.5 million tonnes, but the headline change was - you guessed it - China.
Its demand for feed grains remains strong and the country's feed and residual use was raised by 5 million tonnes to a record 30 million tonnes. This eclipses the previous record of 26 million tonnes set in 2012-13.
China's domestic corn prices also continue to run at a premium to wheat, encouraging greater use of wheat rather than corn for stock feed purposes.
Auction volumes of old-crop stocks in China have increased, which is expanding feed-quality wheat availability. There have been almost 14 million tonnes sold in the first five weeks of 2021.
But the USDA only increased imports by 1 million tonnes, meaning 80 per cent of the increase in feed use was taken out of ending stocks.
This brought these down by 4 million tonnes to just below 155 million tonnes.
That said, wheat imports at 10 million tonnes are almost double those of last season and more than triple the 2018-19 level.
Last week's WASDE report confirmed several significant themes, including that China continues to be the driver on the demand side of the global supply and demand equation.
Its appetite is massive and there are no signs it will abate in the near future.
On the production side, all eyes are firmly on South America - where consolidation of current production estimates is critical.
Any setbacks there could quickly spark another market rally, particularly in corn.
