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June WASDE serves the markets a reality check

USDA is not worried about global weather issues over the past month - yet.

3 Min Read
World map with wheat and down arrow
Getty Images/Leonid Sorokin

The June 2024 World Agricultural Supply and Demand Estimates did not offer a lot of help to grain markets on Wednesday afternoon, particularly to wheat markets that were already trading at a loss ahead of the report’s release. Increased U.S. hard red winter wheat production, smaller than expected reductions to Brazilian soybean and Russian wheat crops, and curtailed global wheat importing volumes all amplified price losses for wheat and soybeans following the report’s release while corn prices drifted lower as USDA left South American production estimates unchanged.

“The markets were hoping that USDA would make bigger cuts to Brazil’s 2023/24 soybean crop following flooding last month in southern Brazil,” according to Farm Futures grain market analyst Jacqueline Holland. “But the state of Rio Grande do Sul only contributes 14% of Brazil’s total soybean production. And when the flooding began, about 66% of the crop had been harvested. “

That means that barely 5% of Brazil’s soybean crop was impacted by the flooding – not enough to convince USDA to take more than 1 MMT (37 million bushels) off Brazil’s 2023/24 harvest estimate, Holland points out.

“I think markets grossly overestimated the amount of damage done by the flooding by not reconciling the damages with June 2024 soybean shipping paces out of Brazil, which are on track to set a new record for June soybean shipments this month,” Holland says.

Corn

USDA made no changes in its corn outlook compared to May. The agency’s estimates for season-average prices also held steady, at $4.40 per bushel. USDA added that it will release a key acreage report on June 28, “which will provide survey-based indications of planted and harvested area.”

U.S. ending stocks for 2024/25 were at 2.102 billion bushels, which was slightly higher than the average trade guess of 2.079 billion. World ending stocks eased slightly to 12.235 billion bushels.

“The market was too optimistic on its cuts to Argentine corn and Brazilian safrinha corn harvests,” Holland says. “I don’t think USDA will be inclined to make additional cuts to South American corn harvests until we’ve seen more harvest progress across the continent.”

Argentina’s corn crop was 30% harvested at the beginning of the month, while Brazil’s safrinha harvest was over 10% complete as of late last week, Holland says.

“USDA may be more likely to make changes to South American corn forecasts – and even Argentina’s soybean forecast – in the July 2024 WASDE after the majority of the crops have been harvested,” she says.

Soybeans

USDA’s latest outlook for soybeans included higher beginning and ending stocks. Reduced crush in 2023/24 led to higher beginning stocks. Soyoil domestic use was also lowered this marketing year but was partly offset by higher exports. Soybean ending stocks moved 10 million bushels higher to 455 million. Price forecasts held steady, at $11.20 per bushel. Soymeal and soyoil prices were also unchanged, at $330 per short ton and 42 cents per pound, respectively.

In South America, USDA slightly lowered Brazil’s production potential to 5.621 billion bushels. Argentine production remained steady, at 2.087 billion bushels. World ending stocks for 2024/25 were down slightly, with a new estimate of 4.669 billion bushels.

Wheat

USDA’s new outlook for 2024/25 U.S. wheat called for larger supplies, unchanged domestic use, increased exports and lower stocks. Production moved 17 million bushels higher from May to 1.875 billion based on better hard red winter production. All-wheat yield estimates improved 0.5 bushels month-over-month, reaching 49.4 bushels per acre.

Export potential increased 25 million bushels to 800 million, with USDA noting that “U.S. wheat prices are expected to be increasingly competitive with reduced exportable Black Sea supplies.” Ending stocks shifted slightly lower, to 758 million bushels. The season-average farm price was boosted by 50 cents per bushel to $6.50, based on higher expected futures and cash prices amid tightening global supplies.

World ending stocks for 2024/25 decreased slightly, to 9.268 billion bushels. Analysts were generally expecting to see a larger decrease, with an average trade guess of 9.228 billion bushels.

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About the Author(s)

Ben Potter

Senior editor, Farm Futures

Senior Editor Ben Potter brings two decades of professional agricultural communications and journalism experience to Farm Futures. He began working in the industry in the highly specific world of southern row crop production. Since that time, he has expanded his knowledge to cover a broad range of topics relevant to agriculture, including agronomy, machinery, technology, business, marketing, politics and weather. He has won several writing awards from the American Agricultural Editors Association, most recently on two features about drones and farmers who operate distilleries as a side business. Ben is a graduate of the University of Missouri School of Journalism.

Jacqueline Holland

Grain market analyst, Farm Futures

Holland grew up on a dairy farm in northern Illinois. She obtained a B.S. in Finance and Agribusiness from Illinois State University where she was the president of the ISU chapter of the National Agri-Marketing Association. Holland earned an M.S. in Agricultural Economics from Purdue University where her research focused on large farm decision-making and precision crop technology. Before joining Farm Progress, Holland worked in the food manufacturing industry as a financial and operational analyst at Pilgrim's and Leprino Foods. She brings strong knowledge of large agribusiness management to weekly, monthly and daily market reports. In her free time, Holland enjoys competing in triathlons as well as hiking and cooking with her husband, Chris. She resides in the Fort Collins, CO area.

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