Farm Director KC Sheperd met with Allendale’s Rich Nelson to discuss the latest WASDE report and its implications for the agricultural market.
Rich explained that while there were some discrepancies and unexpected changes, particularly in the production and stocks of corn, soybeans, and wheat, overall, the report indicated a good-sized crop for the US.
“Wheat was where the superstar discussion happened,” Nelson said. “We have to recognize that this crop is certainly separating itself from the prior two years of problem crops.”
The trade expected a 45 million bushel increase for new crop production, but the USDA reported a 131 million bushel increase on the July report.
USDA also slightly lowered soybean production to 4.435 billion bushels (bb) and lowered soybean ending stocks to 435 million bushels (mb). Friday’s new-crop U.S. ending stocks estimates were bullish for corn, neutral for soybeans and bearish for wheat.
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 increased its estimate of all wheat production to 2.008 billion bushels, up from 1.875 bb in its June report. That is the highest in eight years.
USDA estimates ending stocks for 2024-2025 wheat at 856 million bushels, up from 758 mb in June. Ending stocks for old-crop wheat increased to 702 mb from June’s estimate of 688 mb.
Total use in new-crop wheat was estimated at 1.959 bb, which is up from 1.924 bb in June, with an increase in exports from 800 mb to 825 mb and an increase in feed and residual of 10 mb.
Wheat farm-gate prices were estimated at $5.70 per bushel, down from $6.50 in June.
Winter wheat production is forecast at 1.34 billion bushels, up 4% from the June 1 forecast and up 7% from 2023. As of July 1, the United States yield is forecast at 52.0 bushels per acre, up 0.6 bushel from last month and up 1.4 bushels from last year’s average yield of 50.6 bushels per acre.
Hard red winter production, at 763 million bushels, is up 5% from last month. Soft red winter, at 344 million bushels, is up less than 1% from the June forecast. White winter, at 234 million bushels, is up 4% from last month. Of the white winter production, 19.0 million bushels are hard white, and 215 million bushels are soft white.
Durum wheat production is forecast at 89.3 million bushels, up 50% from 2023. Based on July 1 conditions, yields are expected to average 42.7 bushels per harvested acre, up 5.7 bushels from 2023. Area expected to be harvested for grain or seed totals 2.09 million acres, unchanged from the Acreage report released on June 28, 2024, but up 30% from 2023.
Other spring wheat production for grain is forecast at 578 million bushels, up 14% from last year. Based on July 1 conditions, yields are expected to average 53.1 bushels per harvested acre, up 7.1 bushels from 2023.
If realized, the United States yield would be a record high. Area harvested for grain or seed is expected to total 10.9 million acres, unchanged from the Acreage report released on June 28, 2024, but 1% below 2023. Of the total production, 532 million bushels are hard red spring wheat, up 14% from 2023.
Globally, USDA estimates wheat production at 796.19 million metric tons in July, an increase from 790.75 in June.
USDA estimates production in the European Union at 130.0 mmt, a decrease from 130.5 mmt. Russian production was unchanged at 83.0 mmt. Production in Ukraine also was unchanged at 19.5 mmt.
On wheat world ending stocks, USDA estimated a decrease to 257.24 million metric tons in July from 252.27 mmt in June.
USDA estimates European Union ending stocks at 10.94 mmt, a decrease from 11.44 mmt last month. Russian ending stocks were estimated at 6.74 mmt, down from 7.74 mmt in June.
CORN
USDA bumped up 2024-25 corn planted acres by 1.5 million acres to 91.5 million acres but held the corn yield at 181 bushels per acre.
That bumped up corn production 240 mb to 15.1 billion bushels.
For demand, USDA projected total Feed and Residual use at 5.83 bb, up 75 mb from June. Ethanol use is forecast at 5.45 bb. Total domestic use is forecast at 12.68 bb.
Exports for the 2024-25 crop are forecast at 2.225 bb, up 25 mb from June.
Ending stocks for the new crop are projected at 2.097 bb, down 5 mb from June and significantly lower than pre-report analyst estimates.
The farm gate price for 2024-25 is projected at $4.30 a bushel, down 10 cents from June.
Looking at the 2023-24 “old crop,” USDA lowered corn ending stocks 223 mb to 1.877 bb. USDA increased both feed and residual used by 75 mb as well as increased exports 75 mb.
Globally, USDA pegs 2024-25 production at 1,224.79 mmt, up 4.25 mmt from June and ending stocks at 311.64 mmt, up 0.87 mmt. USDA pegs 2024-25 Brazilian corn production at 127 mmt and Argentina at 51 mmt.
On the old crop globally, USDA lowered corn ending stocks 3.26 mmt to 309.13 mmt.
USDA also held Brazil’s 2023-24 production at 122 mmt. Exports remain pegged at 50 mmt.
USDA also lowered Argentina’s production to 52 mmt. Export volume was lowered 1 mmt to 37 mmt.
SOYBEANS
Farmers will plant 86.1 million acres of soybeans in 2024, resulting in a 4.435-billion-bushel crop when a 52-bpa trendline yield is applied. Production is down 15 million bushels from last month’s forecast.
USDA lowered its ending stocks forecast for the 2024-25, new-crop marketing year by 20 mb as well, to 435 million bushels. USDA lowered its beginning stocks estimate by 5 mb but left forecasts for crush, export, seed, and residual use unchanged from last month. The national average farm gate price declined by a dime to $11.10 per bushel.
For the old-crop marketing year, USDA lowered its ending stocks forecast by 5 mb, reflecting a corresponding cut to imports. The national average farm gate price dropped by a nickel to $12.50 per bushel.
Globally, USDA made minor revisions to ending stocks estimates for both new- and old-crop marketing years. For 2024-25, stocks declined by 0.14 mmt to 127.76 mmt.
In the 2023-24 year, which includes the recently concluded South American harvest, USDA raised the ending stocks estimate 0.18 mmt to 11.25 mmt. USDA lowered Argentina’s production to 49.5 mmt but left Brazil unchanged at 153 mmt.
LIVESTOCK
Friday’s WASDE report was relatively supportive to both the beef and cattle market’s for the rest of 2024, said DTN Livestock Analyst ShayLe Stewart. Beef production for 2024 was increased by 65 million pounds, as although the number of cows being slaughtered has been reduced because of availably, fed steer and heifer processing speeds are expected to remain aggressive through the remainder of 2024. Quarterly steer price projections were increased for 2024 as well: second-quarter steer prices in 2024 are expected to average $188.42 (up $2.42 from last month), steer prices in the third quarter are expected to average $190 (up $7 from a month ago), and steer prices in the fourth quarter of 2024 are expected to average $188 (up $2 from last month). And steer prices in the first quarter of 2025 are anticipated to average $188 (up $2 from last month’s projections). 2024 beef imports fell by 25 million pounds from last month’s report, but 2024 beef exports were increased by 90 million pounds.
Friday’s WASDE report showed mixed support for the pork and hog markets through the rest of 2024. 2024 pork production was increased by 35 million pounds, as not only are carcass weights expected to increase through the second half of the year, but packers are also running more aggressive chain speeds. Quarterly hog price projections were a little disheartening as the influx in supply is likely going to affect cash prices. Hog prices in the second quarter of 2024 are expected to average $65.53 (down $0.47 from last month’s report), hog prices in the third quarter are expected to average $63 (down $5 from last month’s report), and hog prices in the fourth quarter of 2024 are expected to average $56 (down $3 from June’s report). And hog prices in the first quarter of 2025 are expected to average $56 (down $3 from last month’s projections). 2024 pork imports remained unchanged at 1,213 million pounds, and pork exports for 2024 fell by 115 million pounds.
