USDA Reports Preview

Friday's July 12 USDA reports will update balance sheets with new estimates from the June 28 Acreage and Grain Stocks reports, including estimates of ground that was not planted at the time of the June survey. Traders have likely lost interest by now but will check to see if USDA is willing to budge on its South American production estimates.

USDA will release its July Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports at 11 a.m. CDT on Friday.

CORN

With bearish noncommercials (speculators) holding their largest short position since April 2019, DTN's National Corn Index ended at $3.84 a bushel on Tuesday, July 9, near its lowest price in over three-and-a-half years. It is no exaggeration to say the mood for corn prices is extremely bearish in early July, and it is possible Friday's report will add to that bearish mood. Dow Jones' pre-report survey of 16 or more analysts expects a higher crop estimate of 15.06 billion bushels (bb), based on USDA's higher 83.4 million harvested acres estimate from the June 28 Acreage report.

The interesting thing this year is that USDA found 88.1 million acres of corn planted in its June survey and estimated 91.5 million acres were eventually planted. Given the wet spring conditions that required replanting in many areas and the flooding that occurred in late June, USDA's 83.4 million acre estimate of harvested corn acres is already suspect.

With a higher production estimate and 4.99 bb of June 1 corn stocks, Dow Jones also expects USDA to increase its estimate of U.S. ending corn stocks in 2024-25 from 2.102 bb to 2.272 bb, the highest in eight years, if true. Demand for corn has been active at these lower prices, but only small changes, if any, look likely for the demand side of the ledger.

Dow Jones' survey also expects small reductions in USDA's production estimates for Brazil and Argentina, but it is possible USDA will stand pat. Analysts surveyed by Dow Jones expect USDA's 122.0 million metric ton (mmt) estimate for Brazil to come down to 121.3 mmt (4.78 bb) and the 53.0 mmt estimate for Argentina to go to 51.4 mmt (2.02 bb). For Brazil, Conab estimates 114.1 mmt of corn production and will update its estimates on Thursday morning, July 11. For Argentina, the Buenos Aires Grain Exchange estimates corn production at 46.5 mmt.

USDA's estimate of world ending corn stocks is expected to increase from 310.77 mmt in June to 312.0 mmt, or 12.28 bb, on Friday, largely due to changes in the U.S. estimates. If true, world corn supplies will be a little less than the current season and similar to the situation it was in three years ago, in 2021-22.

SOYBEANS

Friday's estimates for U.S. soybean supplies are apt to be neutral with Dow Jones expecting USDA to estimate a 4.416 bb crop in 2024, down a little from the June estimate of 4.450 bb. Dow Jones also expects USDA to slightly lower its estimate of U.S. ending soybean stocks in 2024-25 from 455 million bushels (mb) to 445 mb. USDA will likely use its new harvested acres estimate of 85.3 million from the June 28 Acreage report and probably won't change the record yield estimate of 52.0 bushels per acre. Similar to corn, it is reasonable to have doubts about USDA's estimate of harvested soybean acres, as the June 28 report explained only 73.3 million acres of soybeans were planted at the time of the survey.

Traders will check USDA's South American estimates, but it is getting a little late to expect much change, and so far, USDA has remained stubbornly higher than most. Analysts surveyed by Dow Jones expect USDA's soybean production estimate for Brazil to be trimmed from 153.0 mmt to 152.1 mmt, or 5.59 bb, while Conab's estimate is at 147.35 mmt, or 5.41 bb. USDA's estimate for Argentina will likely stay at 50.0 mmt (1.84 bb), near the local estimate of 50.5 mmt. Dow Jones expects USDA to slightly reduce its estimate of world soybean stocks from 127.9 mmt to 127.1 mmt, or 4.67 bb, a record high, based on the assumption Brazil will continue to expand cropland production this fall.

WHEAT

World wheat prices experienced some bullish excitement in May as major crop areas experienced adverse weather, but the bullishness has dissipated, and U.S. prices are now back near their lowest levels in three years. In June, USDA estimated 2024-25 world ending wheat stocks at 252.27 mmt, or 9.27 bb, the lowest in nine years, after reducing production estimates for the European Union, Russia and Ukraine by a total of 8 mmt, or 294 mb. Harvest gossip has suggested Russian yields have been better than expected, and Russian prices have fallen recently, from $225 to $219 per metric ton in the week ended July 9, reported the International Grain Council. Traders will be watching USDA's assessment of world wheat production Friday, but according to Dow Jones, only a slight increase is expected in USDA's estimate of world ending wheat stocks, from 252.27 mmt to 252.60 mmt (9.28 bb).

NASS's Crop Production report will have a new round of U.S. wheat production estimates Friday, and modest increases are expected for both winter and spring wheat totals. Dow Jones expects U.S. wheat production to increase from 1.875 bb to 1.913 bb and USDA's estimate of new-crop ending wheat stocks to be raised from 758 mb to 793 mb, the highest in four years. There is a chance USDA will raise its 800 mb export estimate for U.S. wheat, as early shipments are up 20% from a year ago.

Dow Jones' survey expects USDA will estimate winter wheat production at 1.317 bb, comprised of 745 mb of hard red winter wheat, 344 mb of soft red winter wheat and 227 mb of white wheat. Other spring wheat production is estimated at 525 mb, and durum is at 71 mb.

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Join us for DTN's webinar at 12:30 p.m. CDT Friday, July 12, as we discuss USDA's new estimates and explain other market aspects. Questions are welcome, and registrants will receive a replay link for viewing at their convenience. Register here for Friday's July WASDE report webinar: https://www.dtn.com/….

Todd Hultman can be reached at todd.hultman@dtn.com

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