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What is USDA seeing?

Ag Marketing IQ: The WASDE report seemed to indicate higher corn feeding and hints at increased soybean exports.

Jacob Burks, Partner

November 14, 2024

5 Min Read
Corn and soybeans on money.
Getty Images/JJ Gouin

Last week was one that I have had circled on the calendar for a while: election, Federal Open Market Committee and WASDE report.

Tuesday’s election carried a lot of uncertainty for Americans and the one thing I was certain about was the uncertainty of the grain market direction regardless of which candidate won the race! Even if you had given me the results on Monday, I don’t feel that I could have given you a good answer to how the markets would react.

That was evident as corn, soybeans and wheat sold off into Tuesday evening as the winner was presumed to be Donald Trump. By the next morning’s open the markets were blasting higher with no change in information.  

The least surprising information release was Thursday when the Fed cut the interest rate by .25% for November and talked of more rate cuts to come. I will leave that discussion to others that are more qualified.

The start of this week’s grain trade has not carried the same torch that was passed through the weekend.

As of this writing all three commodities are working on three consecutive days lower following a rather bullish USDA supply and demand report on Friday. For bulls out there and the producers that had not sold enough inventory, Tuesday’s action was as disappointing as tuning into Yellowstone and not seeing John Dutton running the ranch!

Related:Dear USDA: Why?

Who’s feeding corn?

Let’s take a dive into what the WASDE told us on Friday.

  • The 2024-25 corn yield estimates were reduced to 183.1, which was well below the market guess of 183.7 and the October estimate of 183.8. It is rare to see a large change from the USDA in the November report, but the rapid harvest pace may have influenced that adjustment. The large reduction was attested mostly to the very dry finish to the growing season in August.

  • Total production was reduced by 60 million bushels to 15.14 billion bushels. With the rapid pace of export sales and an abundant ethanol grind, it was a little surprising they left the demand unchanged.

  • Domestic ending stocks fell to 1.938 billion bushels, which was below the trade guess of 1.946 billion and last month’s estimate of 1.999 billion.

  • World ending stocks were reduced to 304.14 million tons versus last month at 306.52 and an average trade guess of 305.70 million tons. For the last several reports we saw them continue to lower world ending stocks of corn. They assume a large increase in feeding corn somewhere in the world.

Less soybeans?

The soybeans provided us with the big surprise. WASDE cut soybean yields 1.4 bushels from 53.1 bpa to 51.7 bpa. This was well below the low trade guess and the largest yield cut from October to November they have ever released. However, this still makes the 2024-25 crop a tie with 2021 for the second largest soybean yield on record.

Related:Hook up the grain trucks!

  • Record soybean yields are posted in seven states.

  • Total 2024-25 soybean production at 4.461 billion bushels is down from 4.582 bbu and the U.S. 2024-25 ending stocks were dropped to 470 million bushels, down from 550 in October.

  • Soybean demand changes came in a 15 mbu reduction to crush and 25 mbu reduction to exports.

  • World balance sheets were trimmed by 2.91 million metric tons from 134.65 mmt to 131.7 mmt. This was below the low end of the pre-report estimates.

More export demand?

The producers must realize that even though we saw a huge cut to soybean yield and ending stocks were slashed by 80 million bushels, we are looking at a world carryout that is nearly 20 mmt larger than what we had last marketing season. 

Corn production outside the U.S. was not increased in this report and consumption has increased. Could this be a precursor to the USDA increasing export demand in the future? 

Ending stocks are now below 2 billion. But I don’t believe we are running out anytime soon.

The world’s attention is focused on the growing season of South American producers and any production problems may give us the opportunity we are looking for.

Related:Can the corn rally go higher?

Burks is a partner at Agmarket.Net. Feel free to contact him directly at 608-384-5438 or anyone at the AgMarket.Net team at 844-4AG-MRKT.

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About the Author

Jacob Burks

Partner, AgMarket.Net

Jacob Burks is a partner of AgMarket.Net, the farm division of John Stewart & Associates. He joined AgMarket.Net as a hedging strategist during 2021. He was previously at First Capitol Ag and Kluis Commodity Advisors. He earned his Bachelor of Science in Agriculture Business from Arkansas Tech University and earned his Masters in Business Administration from Southeastern Oklahoma State University.

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