USDA largely held pat on its June supply and demand numbers despite expectations that there would be lower corn ending stocks and lower production in South America as well. The numbers should surprise the grain trade, which was expecting some movement in the supply side.
Farm Director KC Sheperd discussed the latest World Agricultural Supply and Demand Estimate report with Allendale’s Rich Nelson, noting little change in grain production despite concerns over old crop export sales. They also observed a drop in the Russian and Ukrainian crops and emphasized the potential of US wheat supply and exports to manage larger stock numbers. Lastly, they discussed developments on the livestock side, including a drop in beef production and potential increases in pork and chicken, and advised monitoring weather and export numbers closely in the future.
Nelson said that in this June report, UDSA is hesitant to make new crop yield changes- the case is generally the same for July. Despite this trend, Nelson said this report has unusually low movement.
“Good news for the wheat side,” Nelson said. “Despite the fact that USDA did raise production on this report, for the U.S. wheat crop, which is very valid because we have a very good crop right now, they actually more than offset that with an increase for exports.”
With a higher supply of U.S. wheat, Nelson said the total supply for world wheat is seeing a slight drop.
“Our hope is that with this net decline in total non-U.S. supply, perhaps we may be able to export our way out of some of these larger stock numbers that we will have this year,” Nelson said.
You can also view the full reports here:
— Crop Production: https://www.nass.usda.gov/…
— World Agricultural Supply and Demand Estimates (WASDE): http://www.usda.gov/…
WHEAT
USDA’s domestic estimate of 1.875 billion bushels of 2024-2025 wheat production was an increase from 1.858 bb in the May report, with average yield estimated at 49.4 bushels per acre is an increase from 48.9 bpa in May.
New-crop ending stocks are estimated at 758 million bushels, a decrease from 766 million bushels in May.
Food, seed and residual use for new crop is estimated at 1.124 bb, an increase from May at 1.899 bb, with exports estimated at 800 mb, increased from 775 mb in May.
U.S. farm gate prices were pegged at $6.50, an increase from $6.00 in the May estimate.
Winter wheat production is forecast at 1.29 billion bushels, up 1% from the May 1 forecast and up 4% from 2023. As of June 1, the United States yield is forecast at 51.4 bushels per acre, up 0.7 bushel from last month and up 0.8 bushel from last year’s average yield of 50.6 bushels per acre.
Hard red winter production at 726 million bushels, is up 3% from last month. Soft red winter at 342 million bushels, is down less than 1% from the May forecast. White winter at 226 million bushels is down 1% from last month.
Global wheat production for 2024-2025 is estimated at 790.75 mmt, a drop from 798.19 mmt in May. Old-crop wheat production is estimated at 787.59 mmt, down from 787.72 mmt last month.
World wheat production in 2024-2025 is estimated at 130.5 mmt in the European Union; 83.0 mmt in Russia; 19.5 mmt in Ukraine; 34.0 mmt in Canada; 29.0 mmt in Australia; and 17.5 mmt in Argentina.
CORN
USDA pegged the 2024-25 “new crop” for corn at 14.86 billion bushels (bb) with a yield of 181 bushels per acre (bpa) on 90 million planted acres, holding pat on the numbers released in May.
For demand, USDA projected total feed and residual use at 5.75 bb. Ethanol use is forecast at 5.45 bb. Total domestic use is forecast at 12.605 billion bushels.
Exports for the 2024-25 crop are forecast at 2.2 billion bushels.
Ending stocks for the new crop are projected at 2.102 billion bushels.
The farmgate price for 2024-25 is projected at $4.40 a bushel.
Looking at the 2023-24 “old crop,” corn ending stocks were pegged at 2.022 bb. The pre-trade report had expected some lowering of old-crop ending stocks.
Ethanol use is forecast at 5.45 bb. Total domestic use is forecast at 12.55 bb
Exports for the 2023-24 corn crop are pegged at 2.15 bb.
Globally, ending stocks for the 2023-24 crop were pegged at 312.39 million metric tons (mmt), down 0.66 metric tons.
USDA held Brazil’s 2023-24 production at 122 mmt. Exports remain pegged at 50 mmt.
USDA Also held Argentina’s production at 53 mmt. Export volume remained at 38 mmt.
For the 2024-25 crop, USDA pegs production at 1,220.54 mmt, up .61 mmt and ending stocks at 310.77 mmt, down 1.5 mmt.
SOYBEANS
USDA forecast new-crop, 2024-25 marketing year soybean production at 4.45 billion bushels with a national average yield of 52 bushels per acre. The production estimate was unchanged from pre-report estimates.
On the new-crop domestic supply and demand balance sheet, USDA boosted ending stocks by 10 million bushels to 455 mb. The only change from last month’s estimates was a 10-mb increase in beginning stocks, reflecting changes to old-crop ending stocks. The national average farm gate price was unchanged at $11.20 per bushel.
For the 2023-24, old-crop marketing year, USDA pinned ending stocks at 350 million bushels, compared to May’s 340 mb estimate. The adjustment was due to a 10-mb reduction in estimated crush demand. The national average farm gate price was unchanged at $12.55 per bushel.
Globally, USDA updated its soybean estimate for the crop Brazil just finished harvesting (2023-24), estimating it 1 million metric tons lower than last month at 153 mmt. Argentina’s old-crop estimate was 50 mmt, unchanged from last month.
Old-crop global ending stocks were adjusted to 111.07 mmt, a decline of less than 1 mmt from last month.
For the new-crop, 2024-25 marketing year, USDA put ending stocks at 127.9 mmt, within the range of pre-report expectations and 0.6 mmt less than last month. Brazil and Argentina production was left unchanged at 169 mmt and 51 mmt, respectively.
LIVESTOCK
Wednesday’s WASDE report was mostly favorable to the cattle and beef markets, said DTN Livestock Analyst ShayLe Stewart. Beef production for 2024 fell by 5 million pounds as the market is currently seeing slower chain speeds but that won’t gravely affect production as heavier carcass weights will offset the market’s slower throughput. Steer prices in the remaining three quarters of the year saw mostly higher price trends compared to last month’s report. Steers in the second quarter of 2024 are expected to average $186 (up $2 from last month), steers in the third quarter are expected to average $183 (up $1 from last month), and the fourth quarter of 2024 is the only quarter that saw a price reduction from last month as steers are now expected to average $186 (down $1 from last month). Beef imports remained steady at 4,171 million pounds for 2024, and beef exports remained steady at 2,818 million pounds for 2024.
Wednesday’s WASDE report shared mixed results for the hog and pork markets, Stewart said. 2024 pork production grew by 42 million pounds as current slaughter speeds are more aggressive than originally assumed and carcass weights are heavier as well. Quarterly hog prices saw a slight reduction from last month’s estimates as second quarter hog prices in 2024 are now expected to average $66 (down $2 from last month), third quarter hog prices are expected to average $68 (down $3 from last month) and fourth quarter prices were unchanged at $56. 2024 pork imports grew by 10 million pounds, but 2024 pork exports grew by 100 million pounds.
