November 2024 USDA Supply & Demand

Futures jumped Friday afternoon after the USDA projections for corn and soybeans came in generally below expectations.

Corn, soybeans and wheat prices moved quickly higher on numbers that turned out to be slightly more bullish than had been predicted.

The USDA reduced its corn crop projection by 60 million bushels (mbu) from last month’s report to 15.143 billion bushels, 1% lower than last year. The report left the acreage projection unchanged at 82.7 million acres and made a slight reduction in yield to 183.1 bushels per harvested acre (bpa).

In addition, ethanol use was unchanged at 4.45 billion bushels.

Soybean production was reduced by 3%, or 121 mbu, from the October forecast to 4.461 billion bushels, which would still be a record high. Yields were cut to 51.7 bpa from 53.1 bpa last month while acreage was unchanged from last month’s estimate of 86.3 million acres, but still 5% higher than 2023.

The smaller crop was, however, predicted to trim U.S. soybean ending stocks to what one analyst called a “more manageable 470 mbu.” Corn stocks were expected to shrink to 1.93 billion bushels.

The USDA’s wheat production estimate was unchanged at 1.97 billion bushels, unchanged from the October prediction. Ending stocks were increased by 3 mbu to 815 mbu.

The cotton crop was reduced slightly to 14.2 million bales, which was still 18% higher than last year.

Worldwide ending stocks projections for corn and soybeans were reduced and came in below expectations. The reductions, however, were pinned in large part to the smaller U.S. crops rather than trouble in South America.

The USDA left most of its South American corn and soybean numbers unchanged from last month, although it nudged the 2023-24 Argentine soybean crop a little higher wile reducing its estimate for the 2024-25 wheat harvest.

Source: USDA, Reuters

October 2024 USDA Supply & Demand

The USDA made only small changes to the numbers that they gave us last month.  

The US corn yield estimate was increased +0.2 to 183.8 bpa, increasing production slightly. The smaller beginning stocks number from the quarterly report was partially offset by a 25 million bushel export increase. In the end, US corn ending stocks fell by 58 million bushels to 1.999 billion bushels. 

For soybeans, the yield was lowered -.01 bpa to 53.1 bpa, which dropped production slightly to 4.582 billion bushels. Other small adjustments to beginning stocks and residual use left US soybean ending stocks unchanged at 550 million bushels again this month.

World carryout totals for corn and soybeans were nearly exactly in line with trade expectations, while the world wheat carryout total was above the average trade estimate, but well within the range of trade guesses.

Overall, the fundamentals haven’t changed much over the past month.

Source: USDA, Reuters

September 2024 Quarterly Grain Stocks & Small Grains Summary

The USDA pegged Sept. 1 US corn stocks at 1.760 billion bushels, down from trade expectations of 1.844 billion bushels, but 400 bushels larger than last September 1.  Soybean stocks were 342 million bushels, down from trade expectations of 351 million bushels, but 78 million bushels larger than last year.

The USDA pegged all-wheat production in 2024 at 1.971 billion bushels. This was 5 million bushels more than trade expected and up 9% from 2023’s 1.80 billion bushel production. All winter wheat was 1.349 billion bushels, 1 million less than trade expected. HRW was 770 million, SRW was 372 million, Durum was 80 million, and WW was 236 million.

Traders did not react strongly to the numbers. Corn moved about a nickel higher after the reports, while soybeans and wheat improved a couple cents.

We have Sell Signals for corn and soybeans. Continue making sales.

Source: USDA, Reuters

September 2024 USDA Supply & Demand

The changes this month from the USDA were mostly minor adjustments from their August estimates, particularly with soybeans and wheat, which both saw little to no changes from last month. In the end US carryout totals for corn and soybeans both declined this month, while US wheat carryout remained unchanged.

For corn, the direction of change was not in line with pre-report trade expectations. While traders forecast the USDA to make cuts to their US corn acreage and yield estimates, the agency left corn harvested acreage unchanged and increased their corn yield estimate half a bushel higher. The result was a US corn production of 15.186 billion bushels, 39 million larger than last month. However, incoming stocks were reduced by 55 million bushels, which canceled out the larger production total and left US 2024-25 new crop corn carryout at 4.586 billion bushels, 16 million smaller than August. Global corn carryout was down from last month but larger than trade expectations.

The USDA left US soybean harvested acreage and yield unchanged this month. Beginning stocks were down 5 million bushels and residual usage was up by 2 million, leaving 2024-25 US soybean ending stocks at 550 million bushels, 10 million fewer than last month. Global soybean carryout was slightly larger than last month when trade expected a small decrease.

The USDA made no changes to their US wheat supply demand table this month. It looked identical to August. Global wheat carryout increased by +600k tons, when trade expected them to decrease by -600k tons.

Source: USDA, Reuters, StoneX

August 2024 USDA Supply & Demand

This morning, we listened to Arlan Suderman (StoneX economist) give his market update prior to the USDA reports. He pointed out that in prior comparable years when crops started out in good condition, like this year, the average yield ended at +7.6% above trend. Trade has considered these potential increased production totals and prices have adjusted accordingly.

From the Reports:

The USDA increased the 2024-25 soybean carryout by 95 million bushels beyond the pre-report trade guess. Corn and wheat went in the opposite direction, with the USDA lowering carryout for both more than trade expected.

The big surprise in the Crop Production report was that US soybean harvested acreage increased by 1% compared to the July report, and the US yield came in at 53.2 bpa, above the 52.5 bpa average trade estimate.

Total planted US corn acreage was -1% lower than July and the yield was increased from 181.0 to 183.1 bpa.

US wheat production was down -1% from July. The average yield was 52.2 bpa, up 0.4 bpa from last month. Harvested acreage for US wheat was down -2%.

World corn and wheat carryout were down from last month but nearly exactly in line with trade expectations. Global soybean carryout was up about 6 million metric tons, when trade expected an unchanged number.

Source: USDA, Reuters, StoneX

July 2024 USDA Supply & Demand

We were buyers this week. We have corn, soybeans, and wheat in Extended 3-Box Buy Signals. We have been telling livestock feeders and users it is time to accumulate. Grain prices are well below any price buyers budgeted earlier in the year. 

Corn

The USDA’s analysis of the stocks and all positions report caused them to increase corn usage estimates for the bushels in the bin, cutting 2023-24 corn stocks 120 million bushels below the lowest trade guess. The average trade guess expected the USDA to increase corn stocks by 27 million bushels.

The USDA also increased usage by 100 million bushels for the new crop year and left the yield estimate unchanged. Their estimate today pegs ending stocks as of August 31, 2025, at 2.097 billion bushels, 215 below the average trade estimate.

World corn carryout increased slightly from the June estimate.

Cheap grain increases usage. We are not trying to make a bullish argument, although we believe prices are cheap enough and have adjusted to current surplus fundamentals. Weather is the biggest uncertainty.

Soybeans

Very small changes were made this month, and the net result is the USDA expects US ending stocks this fall to total 345 million bushels. Their forecast is for the US to have 435 million bushels, 100 million more, left in the bin a year from now, not a positive fundamental outlook. On the technical side, spec funds are loaded up on shorts.

World carryout was virtually unchanged, down less than a quarter of a ton from the June estimate.

Wheat

US wheat supplies were raised on increased wheat production and beginning stocks. All wheat production is raised 134 million bushels to 2,008 million, on an increase in harvested area and higher yields. Ending stocks were also increased 98 million bushels for the 2024-25 crop. World wheat carryout increased just under 5 million metric tons.

Source: USDA, Reuters, StoneX

June 2024 Acreage & Quarterly Grain Stocks

The USDA June quarterly stocks estimates were sharply higher than last year as expected but ended up even larger than the average trade estimates. However, they fell within the range of trade estimates. This was true for corn, soybeans, and wheat.

The June acreage estimates were mixed compared to expectations. Corn acres came in at 91.475 million acres, which was 1.122 million acres larger than the average trade estimate and exceeded the highest trade estimate. This large total was obviously a bearish surprise to traders, as corn prices fell rapidly following the report.

The USDA soybean acreage estimate swung in the opposite direction of corn. Bean acres were 653k smaller than the average trade estimate and fell below the smallest trade estimate. The smaller soybean acreage total tempered the impact of the larger than expected stocks number. Soybeans traded higher post-report.

The wheat picture was also split, with larger than expected stocks, but smaller than expected acres. All wheat acres came in at 47.24 million acres, 417k smaller than the average trade estimate. Wheat prices slipped lower post-report.

Source: USDA, Reuters, StoneX

June 2024 USDA Supply & Demand

Nothing jumped out as a headline in USDA reports

The government didn’t change anybody’s mind with their numbers this month. The USDA only made small adjustments to their US and global supply demand numbers this month. The one area trade expected changes, in South American production, they continued to stick to their guns of higher production numbers. The USDA is not ready to follow the private South American estimates lower.

We are heading into the important part of the US crop growing season. It is hard to get crops rated much better than 75% good to excellent. Normally crop ratings will only go down from here, but ratings are still expected to be good again this week.

Expect choppy trade to continue.

USDA US Summary

The 2024-25 U.S. corn outlook is unchanged relative to last month. The season average price received by producers remains at $4.40 per bushel. USDA will release its Acreage report on June 28, which will provide survey-based indications of planted and harvested area.

The 2024/25 outlook for U.S. soybeans includes higher beginning and ending stocks. Higher beginning stocks reflect reduced crush for 2023/24, down 10 million bushels on lower soybean meal domestic use that is partly offset by higher exports. Soybean oil domestic use is also lowered for 2023/24 and partly offset by higher exports. With increased supplies for 2024/25 and no use changes, soybean ending stocks are projected at 455 million bushels, up 10 million.

The soybean price is forecast at $11.20 per bushel, unchanged from last month. Soybean meal and oil prices are also unchanged, at $330 per short ton and 42 cents per pound, respectively.

The outlook for 2024/25 U.S. wheat this month is for larger supplies, unchanged domestic use, increased exports, and lower stocks. Supplies are raised as all wheat production is forecast at 1,875 million bushels, up 17 million from last month on higher Hard Red Winter production more than offsetting reductions in Soft Red Winter and White Winter.

The all wheat yield is 49.4 bushels per acre, up 0.5 bushels from last month. The export forecast is raised 25 million bushels to 800 million, as U.S. wheat prices are expected to be increasingly competitive with reduced exportable Black Sea supplies. Ending stocks are lowered slightly to 758 million bushels but still significantly higher than the previous year. The 2024/25 season-average farm price is raised $0.50 per bushel to $6.50 on higher expected futures and cash prices and tightening global wheat supplies.

Source: USDA, Reuters, StoneX

May 2024 USDA Supply & Demand

This month’s WASDE report was surprisingly bullish for US corn and wheat, with old and new crop carryout estimates of both coming in smaller than trade expectations. Prices of corn and all three wheat crops continued to move higher shortly after the report release.

Lean into these continued rallies by making more sales of corn and all three classes of wheat. We were previously at 20% old crop and 10% new crop.

Add another increment of 10% to old crop, and 5% to new crop sales.

The USDA made some cuts to their South American production estimates, but overall, they cuts were smaller than trade expected. Thus, the USDA continues to lower their South American production estimates at a conservative pace.

Corn

The USDA cut 100 million bushels from their old crop (2023-24) US carryout estimate, which was 78 million below the average trade estimate.

Then the first 2024-25 carryout estimate for US corn came in 182 million bushels less than trade expected. The new crop production estimates begin with assumptions of 90.0 million acres planted and a 181.0 bpa trend line yield. The USDA made upward adjustments to Feed and Residual and Exports compared to the current year, while leaving ethanol production unchanged. This put the demand total for the new crop year 100 million bushels above the current crop year.

Soybeans

US soybean carryout for the 2023-24 old crop year was unchanged from last month, which was in line with expectations. For the 2024-25 new crop year, the USDA’s first US soybean carryout estimate was 445 million bushels, which exceeded trade expectations. This is an ample soybean carryout total for the new crop year. Bean prices initially dropped following the report, before recovering and moving a few cents higher.

The USDA assumed 86.5 million acres of soybeans will be planted, and their initial yield estimate for the 2024-25 new crop year was 52.0 bpa. Imports were down, while crush and exports both increased compared to the current year estimates.

Wheat

The USDA lowered their 2023-24 wheat carryout estimate by 10 million bushels this month, when trade expected them to essentially leave it unchanged. Their 2024-25 new crop wheat carryout came in 20 million bushels below the average trade estimate. These two smaller than expected carryout estimates continued to support the current wheat rally, which was largely stimulated by widespread freeze damage in Russia.

Wheat prices were higher following the report. Add to your wheat sales.

New crop wheat production was estimated at 1.858 billion bushels, which was 26 million less than trade expected.

Source: USDA, Reuters, StoneX

April 2024 USDA Supply & Demand

USDA report contained only small adjustments this month

Traders see today’s fundamental forecast showing more than adequate supplies and ending stocks. The South American corn crop is still at risk and the USDA has refused to lower their estimate as far as private trade estimates have fallen. All of the northern hemisphere crops are into their risk periods.

We have written virtually that same paragraph following each one of the most recent reports. The numbers have not really changed much since last fall, except the South American crops turned out to be smaller than expected. Today’s fundamentals have been well traded in recent weeks. There were no surprises today.

Now we are all focused don’t he growing conditions in all the major production areas in the world, especially the United States. Most areas are off to a pretty good start but it is just April and too soon to tell how good crops are going to be.

Today’s fundamentals tell traders that prices will be cheap this fall if we don’t have any weather problems in the United States or some other kind of black swan event that changes the way we view food prices.   

Source: USDA, Reuters, StoneX