July WASDE surprises trade with old crop ending stocks reductions

Today, USDA released the July World Agricultural Supply and Demand Estimates (WASDE) report.

2024/2025 U.S. corn and soybean production

USDA updated planted and harvested acres for corn and soybeans with the numbers reported in the June Acreage report.

Yield estimates were held steady from last month. The trade expected a slight yield decrease for both crops.

Corn production was pegged at 15.100 billion bushels, up from 14.860 billion bushels the month prior. Soybean production was pegged at 4.435 billion bushels, down from 4.450 billion last month. The trade expected production estimates to be lower than what USDA reported.

2024/2025 U.S. ending stocks

The trade was expecting new crop corn ending stocks to go up but the WASDE report pegged the U.S. 2024/2025 corn ending stocks lower. Soybean ending stocks were reduced more than the trade expected while wheat ending stocks were increased more than expected.

2024/2025 U.S. ending stocks estimates (bushels)
	July	Trade expectations	June
Corn	2.097 billion	2.289 billion	2.102 billion
Soybeans	435 million	447 million	455 million
Wheat	856 million	785 million	758 million

2023/2024 U.S. ending stocks

Much like with the new crop estimate, the WASDE report decreased corn ending stocks for the 2023/2024 marketing year when the trade was expecting an increase. Soybean ending stocks were also lowered when an increase was expected. Wheat ending stocks were increased more than expected.

2023/2024 U.S. ending stocks estimates (bushels)
	July	Trade expectations	June
Corn	1.877 billion	2.047 billion	2.022 billion
Soybeans	345 million	357 million	350 million
Wheat	702 million	698 million	688 million

2024/2025 world ending stocks

For the 2024/2025 marketing year, USDA increased global corn ending stocks as the trade expected. Soybean ending stocks were decreased but not as much as the trade expected. Wheat ending stocks defied expectations by going up when the trade expected a decrease.

2024/2025 world ending stocks estimates (million metric tons)
	July	Trade expectations	June
Corn	311.6	311.6	310.8
Soybeans	127.8	127	127.9
Wheat	257.2	252.2	252.3

2023/2024 world ending stocks

For the 2023/2024 marketing year, USDA decreased global corn ending stocks more than expected. Soybean ending stocks were increased, when a decrease was expected. Wheat ending stocks were pegged higher than expected.

2023/2024 World ending stocks estimates (million metric tons)
	July	Trade expectations	June
Corn	309.1	312	312.4
Soybeans	111.3	110.9	111.1
Wheat	261	259.9	259.6

2023/2024 Argentina and Brazil crop production

Month-over-month, USDA reduced both the corn and soybean estimates for Argentina. USDA pegged Argentina corn production higher than expected and soybean production lower than expected. Brazil corn and soybean production estimates were held steady.

Argentina and Brazil corn production (million metric tons)
	July	Trade expectations	June
Argentina	52	51.7	53
Brazil	122	121	122

Argentina and Brazil soybean production (million metric tons)
	July	Trade expectations	June
Argentina	49.5	50	50
Brazil	153	151.8	153

More from USDA

Corn

“This month’s 2024/2025 U.S. corn outlook is for larger supplies, greater domestic use and exports, and slightly lower ending stocks,” says USDA in the report. “Corn beginning stocks are lowered 145 million bushels, mostly reflecting a greater use forecast for 2023/2024. Exports are raised [25] million bushels based on current outstanding sales and shipments to date. Feed and residual use is up 75 million bushels based on indicated disappearance in the June Grain Stocks report. Corn production for 2024/2025 is forecast up 240 million bushels on greater planted and harvested area from the June Acreage report. The yield is unchanged at 181 bushels per acre. Total use is raised 100 million bushels with increases to both feed and residual use and exports based on larger supplies and lower expected prices. With use rising slightly more than supply, ending stocks are down 5 million bushels.”

Soybeans

“Soybean production is projected at 4.4 billion bushels, down 15 million on lower harvested area,” says USDA in the report. “Harvested area, forecast at 85.3 million acres in the June Acreage report, is down 0.3 million from last month. The soybean yield forecast is unchanged at 52 bushels per acre. With slightly lower beginning stocks, reduced production, and unchanged use, ending stocks for 2024/2025 are projected at 435 million bushels, down 20 million from last month.”  

Wheat

“The outlook for 2024/2025 U.S. wheat this month is for larger supplies, domestic use, exports, and ending stocks,” says USDA in the report. “Supplies are raised on increased wheat production and beginning stocks. All wheat production is raised ... to 2.008 billion, on an increase in harvested area and higher yields.... Beginning stocks are raised on the June 1 stocks reported in [the National Agricultural Statistics Service Grain Stocks report.] Imports are lowered 15 million bushels to 105 million. Feed and residual use is increased 10 million bushels to 110 million on larger supplies. With larger supplies, exports are raised 25 million bushels to 825 million. Projected 2024/2025 ending stocks are raised 98 million bushels to 856 million, up 22% from last year and the highest in five years.” 

Trade reaction

Naomi Blohm, senior market adviser with Total Farm Marketing: “Today’s report was mostly in line with expectations regarding production. No changes to yield, with changes likely expected in the August report. The eyebrow-raising point that made trade stop in its tracks was how the USDA reduced old crop ending socks.... Because of the reduction of old crop ending stocks, new crop ending stocks came in also below the average trade estimate heading into today’s report. Trade initially got excited about this news, however, then reality set in; corn carryout is set to be at 2 billion bushels for another year and soybean carryout continues to hedge higher. Now I will say, this news allows us to have the need to put weather premium back into the market quickly should Mother Nature have a trick up her sleeve come August.”

Jeremy McCann, account manager with Farmer's Keeper: “The July WASDE report is typically not one full of surprises and this one was no different. The big piece of news from this report is coming from 2023/2024 corn ending stocks, which came in well below the trade expectations and the numbers published in June. This is indicative of a lot of old crop being moved off farm and sold ahead of harvest. While this may add a little length to the September contract and producers' existing old crop, it does not change much in the grand scheme of things. Our yield projections remain the same and a slight decrease to 2024/2025 ending stocks is not enough to bring us to levels deemed profitable by the producer.”