Jul 12 / Alef Dias and Ignacio Espinola

Post-WASDE Monthly Report - 2024 07 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)

Following last month report trend, the 24/25 supply and demand balance for soybeans came with almost no adjustments.

On South America, the USDA seems comfortable with a Brazil production of 153 M mt for current crop and 169 M mt for 24/25 crop, both numbers unchanged. On the Argentina side, the report adjusted the current crop into -0.5 M mt, leaving a final number at 49.5. M mt and adjusting also the final stocks.

For US, the agency brought a small cut to production and ending stocks mostly due to the lower planted area – that was expected after the June acreage report.

 Finally, in China, the major change for the Asian Giant came from the imports, with an expectation of +3 M mt, leaving a final number at 108 M mt, in line with the last purchases they have done from Brazil over the last weeks. (Almost +3 M mt more vs historical average).

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



Corn: US Corn production comes in line with market expectations

Figure 2: US Corn - Ending Stock (M bu)

On the US side, there was an increase for 24/25 production number of 260M bu, leaving a final number at 15100M bu, very close to market’s median estimate of 15079M bu. Conversely, higher exports for both current and next crop led to tigher-than-expected ending stocks, curbing the bearishness with the higher production.

We were expecting a certain adjustment over the production numbers in the South American side but this did not happen this time. The report printed a 52 M mt production for Argentina, 1 M mt less than the previous report, a very optimistic production number considering that some analysts are talking about a 46 Mmt crop. On the Brazilian side, the report remained unchanged, printing 122 M mt. As a reference, CONAB’s number is 116 M mt.

We will have to wait for the next report to see if the USDA finally cuts the production numbers from South America, adjusting the actual misbalance on the global SnD.

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



Wheat: Bearish numbers all across the board

Figure 3: US Wheat - Production (M bu)

In the US, production of all wheat classes were raised due to the accelerated winter harvest progress and great crop conditions for the spring crop. The first 2024 survey-based production forecasts for other spring wheat and Durum indicated an increase from last year for both classes. That lead to higher yields and harvested area despite the cut to planted area - in line with June’s acreage report.

Beginning stocks were also raised due to the higher figures seen in the last NASS Grain Stocks. Still, the production and ending stocks adjustments were much larger than market analysts were expecting, leading to a very bearish session for Chicago Wheat.

World ending stocks also came above market’s maximum expectations, with the production increases in the US (+3.6M mt), Pakistan (+1.4M mt) and Canada (+1M mt) being the largest contributors to the upward adjustment of 5M mt to global ending stocks, that now sit at 257.2M mt for the 24/25 season. Pakistan’s production forecast was raised to a record 31.4M mt, based on government estimates indicating a large yield. Canada’s production was increased to 35M mt on improved moisture conditions in the Prairie Provinces.


WASDE Commentary — Grains

Written by Alef Dias
alef.dias@hedgepointglobal.com

Written by Ignacio Espinola
ignacio.espinola@hedgepointglobal.com

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