Jun 12 / Alef Dias and Ignacio Espinola

Post-WASDE Monthly Report - 2024 06 12

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"Comments about the results of USDA's report"

Soybeans: USDA confirms small correction on US Ending Stocks

Figure 1: US Soybeans - Ending Stock (M bu)

The 24/25 supply and demand balance for soybeans has come up with no major surprises. On South America, the USDA has adjusted Brazil’s 23/24 crop by a 1 M mt reduction, leaving a final number of 153 M mt which is on the high part of the expected range, 149-154. On Argentina, the report came up unchanged at 50 M mt in line with markets expectations.

For the US, the report shows a higher number of beginning stocks and ending stocks, 455 M bu 24/25 crop. The reason behind this increase is the bigger beginning stocks due to a reduction in old crop exports.
Finally, on the global view, the USDA has adjusted the ending stocks to a 127.9 M mt, a reduction of only 0.6 M mt.

You can check the most important numbers from the report here.

Corn: no major changes

Figure 2: Brazil Corn - Production (M bu)

The USDA has left the production number for Argentina unchanged, leaving it at 53 M mt versus 46.5 M mt expected from local agents. It seems that the USDA is not taking into consideration the damage that the chicharrita disease has caused in the Argie crop.
On the Brazilian side, the production number remains at 122 M mt which is higher than the last CONAB number, 116 M mt. This week we will have a new CONAB report where we should have an update on their production number.
The USDA shows Ukrainian crop number at 27 M mt which contrasts with the Ukrainian Department of agriculture who recently informed that they are expecting 25.5 M mt of corn production for 24/25. This report shows a comfortable scenario for corn worldwide. We shouldn’t see major adjustments on the market after this report. Please note that we are still under the US weather market so there could be some major changes if anything happens with the weather.

You can check the most important numbers from the report here.

Wheat: A bearish report despite Russia cuts

Figure 3: World Wheat - Ending Stocks (M ton)

As expected, it was an eventful WASDE for wheat. The main highlight was the cuts in Russian production, that was a big adjustment (-5M mt, to 83M mt) given USDA’s pattern, but the final figure is still above most private estimates (our estimate is at 79.2M mt). Ukraine and the EU also contributed to a total trim of 5.7M mt to global production in 24/25.

In Ukraine, production was lowered 1.5M mt to 19.5M mt due to hot and dry weather conditions. The EU forecast was trimmed by 1.5M mt to 130.5 M mt after prolonged wet weather in France resulted in fewer growing degree days and lowered the yield potential.

However, other adjustments contributed to a bearish report at the end of the day. Ending stocks for the 23/24 season were raised by 1.8M mt, while global consumption was cut by 4.3M mt to 798M mt, mainly on lower feed and residual use in the EU, Russia, and Ukraine. As global supplies tighten and prices increase, wheat for feed use is becoming less competitive in some countries. Consequently, world ending stocks for the 24/25 marketing year were trimmed by 1.3M mt to 252.3M mt vs a market estimate of 251M mt, leading to a bearish response by the markets after the report.

Nonetheless, US figures brought some bullish results. Firstly, production wasn’t raised as much as market was expecting (1875M bu vs 1882.5M bu). Secondly, the export forecast is raised 25M bu to 800M bu, as US wheat prices are expected to be increasingly competitive with reduced exportable Black Sea supplies. Consequently, US ending stocks for 24/25 were cut by 8M bu while market was expecting an increase of 13.5M bu.

WASDE Commentary — Grains

Written by Alef Dias

Written by Ignacio Espinola


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