Friday’s World Agricultural Supply and Demand Estimates (WASDE) report from USDA had few surprises for the markets eager for fresh fundamental news ahead of the holiday season. The report’s widest watched item – Brazilian soybean production – pointed to only minor decreases to 2023/24 global soybean production and supplies, which kept gains alive in the soybean market following the report’s release but didn’t provide much additional upward price momentum.

Corn

USDA raised its corn export estimates by 25 million bushels to 2.1 billion, citing the current pace of sales and shipments to-date. USDA made no other changes to the balance sheet, thereby reducing ending stocks by 25 million bushels to 2.1 billion. That was within the range of trade guesses but still below the average analyst estimate of 2.152 billion bushels.

The season-average price for producers was left unchanged, at $4.85 per bushel.

“The U.S. is seeing some great export demand for corn from Mexico, which has been a key factor in keeping prices steady over the past couple months,” according to Farm Futures grain market analyst Jacqueline Holland. “It was very encouraging for corn prices that USDA did increase the 2023/24 corn export volume. It means that next summer’s U.S. corn export season could present U.S. farmers with more profit opportunities than in the past couple years.”

South American production was steady, with USDA pegging Brazil’s potential at 5.079 billion bushels and Argentina’s potential at 2.165 billion bushels. Analysts were expecting to see modest reductions for both countries.

World ending stocks for 2023/24 increased slightly, from 12.401 billion bushels in November to 12.410 billion bushels in today’s report. Analysts were expecting to see a small decrease to 12.340 billion bushels.

Soybeans

Soybean supply and use projections for the 2023/24 marketing year held steady from November. That leaves ending stocks unchanged, at 245 million bushels, versus the average trade guess of 243 million bushels.

The season-average price for producers also held steady, at $12.90 per bushel. Meantime, the price of soymeal bumped $10 higher to $390.00 per short ton. In contrast, the price of soyoil slid 4 cents lower, to 57 cents per pound.

“Even though USDA made some downward revisions to Brazil’s 2023/24 crop, it is still going to be a record-breaking year for Brazilian soybean production,” Holland says. “And even with a recent downturn in hog producer profitability in China, USDA’s decision to increase China’s soybean import volumes likely suggests that the Chinese-Brazilian trade relationship will continue to dominate the soy market. However, U.S. producers could stand to reap profit opportunities if planting delays throw off shipping schedules from Brazil to China early in 2024.”

Brazil’s production potential eased to 5.915 billion bushels. Analysts were expecting to see an even bigger decrease, offering an average trade guess of 5.884 billion bushels. In Argentina, production estimates held steady at 2.165 billion bushels, which was slightly above the average trade guess of 2.159 billion bushels.

World ending stocks moved from 4.207 billion bushels in November down to 4.196 billion bushels. That was slightly higher than the average trade guess of 4.143 billion bushels.

Wheat

USDA’s outlook for wheat this month includes “unchanged supplies, and domestic use, higher exports and reduced ending stocks.” Exports increased 25 million bushels to 725 million after a flurry of recent flash SRW sales to China. Ending stocks shifted 25 million bushels lower to 659 million bushels. That is lower than the average analyst estimate of 684 million bushels but still 13% higher year-over-year.

The season-average farm price increased by a dime to $7.30 per bushel due to the lower projected stocks and marketing-year prices reported to-date.

“Wheat’s story remains a global one,” Holland says. “Upward production revisions for Canada and Australia have helped to encourage buyers in Southeast Asia and China to take advantage of recent market downturns. But the world’s largest bloc of wheat buyers – North Africa – pulled back their import volumes slightly, suggesting that high prices continue to constrain many market players.”

World ending stocks decreased from 9.511 billion bushels in November down to 9.486 billion bushels. That was slightly lower than the average trade guess of 9.511 billion bushels.