Despite hopes for smaller Brazilian corn and soybean crops leading up to Friday’s World Agricultural Supply and Demand Estimates report, USDA only made minor cuts to Brazil’s 2023/24 soybean crop while adding more volume to anticipated Brazilian soybean exports.

But a big increase in Chinese soybean import volumes (110 million bushels) helped to reverse early morning losses for new crop soybean futures and will largely consume the additional Brazilian exportable supplies reported in the March 2024 WASDE.

Corn prices were largely unchanged from earlier trading session losses as increased export volumes form Argentina and Ukraine kept global corn supplies plentiful. Wheat prices gained momentum after USDA increased wheat import volumes into Southeast Asian buyers by nearly 7%.

“March WASDE reports are typically quiet, and today’s report was not an exception,” according to Farm Futures grain market analyst Jacqueline Holland. “The Prospective Plantings report due later this month will likely provide more price activity, particularly for new crop futures contracts.”

Corn

USDA made no changes to its ending stocks estimates in today’s report relative to February’s projections, leaving that number at 2.172 billion bushels. The agency did lower the season-average to $4.75 per bushel “based on observed prices to date.”

South American production trends showed Argentina’s production potential moving from 2.165 billion bushels in February up to 2.205 billion bushels. In Brazil, production estimates held steady, at 4.882 billion bushels.

Global corn production in 2023/24 faded to 12.584 billion bushels, which was also slightly lower than the average trade guess of 12.614 billion bushels. Declines were noted in South Africa, Ukraine, Mexico, Venezuela and Russia.

Soybeans

As with corn, USDA left soybean supply and use estimates steady from February. That left ending stocks stable at 315 million bushels, which was modestly below the average trade guess of 319 million bushels.

The season-average price for soybeans and soymeal also remained steady this month, while soyoil prices eased 2 cents lower to 49 cents per pound.

In South America, Argentina’s production estimates held steady at 1.837 billion bushels, while Brazilian soybean production faded slightly lower to 5.695 billion bushels.

“The market was hoping USDA would make more significant cuts to 2023/24 Brazilian soybean production,” Holland says. “In recent weeks, some of my fellow analyst friends have told me that their Brazilian farmer sources have been quiet about yields during harvest season. And if Feedback from the Field has taught me anything, you clam up when you’re on track for good yields!”

USDA also tends to be conservative when revising South American production figures, particularly if weather patterns have not been irregular enough to justify a significant revision, Holland adds.

“So, the 37-million-bushel (1 MMT) cut to Brazil’s crop reflects dry early season conditions, but USDA’s 110-million-bushel (3 MMT) served to remind the markets that the slightly lower yields aren’t going to impact Brazilian exporting paces in the coming weeks and months,” she says. “The voices who have been advertising lower Brazilian soybean yields in recent weeks tend to be farmer groups, who have a financial interest in seeing lower yields because that raises prices received at the farmgate. Those voices are only confusing farmers, as traders clearly already priced in decent Brazilian soybean yields leading up to today’s report.”

Farmers are lucky that USDA increased China’s soybean import volumes to a new record high of 3.858 billion bushels (105 MMT) in the wake of higher Brazilian soybean exports, Holland also points out. USDA also made backdated increases to China’s 2022/23 soybean import volumes, raising them 134 million bushels (3.65 MMT) to 3.839 billion bushels (104.5 MMT).

“Over the next six months, Brazil’s soybeans are likely to dominate the international market,” she concludes. “That prospect held old crop soybean prices largely unchanged to slightly lower following the WASDE report release. But if China continues buying up oilseeds and feed grains at rapid volumes (China has booked several large purchases of U.S. and Ukrainian feed grains over the past week), U.S. soybean producers could see more profit opportunities from the export market this coming fall.”

Global ending stocks were lowered from 4.263 billion bushels in February to 4.198 billion bushels this month, mirroring analyst expectations.

Wheat

Wheat ending stocks increased modestly, trending from 658 million bushels in February up to 673 million bushels. Analysts were expecting a fractional decline, in contrast, offering an average trade guess of 657 million bushels. That leaves ending stocks 18% higher year-over-year so far.

USDA also lowered the season-average farm price this season by a nickel to $7.15 per bushel.

Globally, ending stocks fell from 9.532 billion bushels in February to 9.509 billion bushels in March. That was a bit below the average trade guess of 9.520 billion bushels.

“USDA made a lot of changes to the global wheat balance sheet in the March 2024 WASDE,” Holland says. “Increases to 2023 Russian wheat production, as well as Ukrainian and Australian export volumes, were largely overlooked in favor of big import increases (62 million bushels, 1.7 MMT) from the Southeast Asian bloc.”

Price gains were limited by decreasing import volumes from Middle Eastern and Chinese buyers, Holland adds. And even though the added Southeast Asian purchases helped to trim 2023/24 global wheat ending stocks, there is still some cause for concern closer to home, she points out.

“U.S. wheat export volumes continue to struggle to compete against cheaper Black Sea and Argentine supplies,” Holland says. “As a result, USDA cut another 15 million bushels from 2023/24 U.S. wheat export prospects, dropping the total to 710 million bushels. That’s the smallest volume of U.S. wheat exported since 1971 – right before the Soviet Grain Robbery. Russia overtook the U.S. as the world’s top exporter of wheat between 2015-2017, but this latest shift signals that the end of an era for U.S. wheat exports has likely already dawned upon us.”