Aggressive Adjustments and Surprise Estimate Forecasts
The Agriculture Department raised its estimate for corn production to 15.1 billion bushels — up from its June projection of 14.8 billion bushels — in the latest World Agricultural Supply and Demand Estimates (WASDE) report issued on Friday. However, the department slightly lowered its prediction for corn ending stocks.
Surprise in Corn Ending Stocks
The USDA slightly decreased the estimated ending stocks for corn, dropping them from 2.102 billion bushels to 2.097 billion bushels. This 5-million-bushel decrease surprised analysts, who had anticipated a much larger figure. Dow Jones had projected the number to be 2.272 billion bushels.
Adjustments to Corn Stocks and Usage
The USDA also lowered its estimate for corn beginning stocks by 145 million bushels — from 2.022 billion to 1.877 billion bushels — citing greater usage forecasts for the 2023/24 period. They raised exports by 75 million bushels based on current outstanding sales and shipments to date and increased feed and residual use by 75 million bushels based on indicated disappearance in the June Grain Stocks report.
Increased Corn Acreage
Corn acres planted rose from the June WASDE’s estimate of 90 million acres to 91.5 million acres, with harvested acres also increasing from 82.1 million acres to 83.4 million. These updated estimates were included in the June 28 acreage report. The corn yield was unchanged from the June acreage report, remaining at 181 bushels per acre, which would be a record.
Changes in Soybean Estimates
The USDA lowered its estimate for soybean ending stocks from 455 million bushels to 435 million bushels. The department now expects soybean production to reach 4.43 billion bushels, down slightly from the previous estimate of 4.45 billion bushels. Soybean export projections held steady at 78 million bushels, while import expectations remained at 15 million bushels.
New crop export bookings for soybeans are at their lowest in 19 years.
Summary of Related Estimates
- The USDA raised soybean ending stocks, lowered wheat estimates, and kept corn steady.
- Furthermore, forecast soybean production at 4.4 billion bushels, down 15 million bushels due to a reduction in harvested area by 300,000 acres, now totaling 85.3 million acres. Yield remains unchanged at 52 bushels per acre.
- They project soybean stocks to end the 2024/25 year at 435 million bushels, a decrease of 20 million bushels from the June projection.
Wheat Estimates Raised
The USDA also raised its ending stock estimates for U.S. wheat to 856 million bushels, a 98-million-bushel increase from last month’s estimates. It raised its U.S. production estimates from 1.8 billion bushels to 2 billion bushels. Meanwhile, decreasing U.S. import expectations from 120 million bushels to 105 million bushels.
Traders noted the aggressive adjustment to production numbers. Marking the second month in a row of U.S. wheat production increases. The projection of about 2 billion bushels, up 133 million from June. A substantial change from the previous estimate.
Price Projections Lowered
The report projected lower prices for corn, soybeans, and wheat. For the 2024-25 marketing year, the USDA estimates the farm-gate price of corn will average $4.30 per bushel. Which is down 10 cents from June’s WASDE. They lowered the soybean price by 10 cents to $11.10 per bushel and reduced the wheat price estimate by 80 cents to $5.70 per bushel.
Market Reaction
The report helped drive the price of December corn up 5 cents to nearly $4.16 per bushel, in trading as of 2 pm EDT, two hours after the WASDE was issued. November soybeans were up just over a penny to $10.69 per bushel.
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