USDA Reports Preview

USDA's corn and soybean production estimates will include objective yield data from the fields for the first time in Thursday's Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports and will get traders' attention, at least for a day. Analysts are expecting modest changes in the numbers, but there is still room for surprises in the 2024 season.

USDA will release both reports at 11 a.m. CDT on Thursday, Sept. 12.

CORN

After a summer of falling corn prices, December corn finally found a pocket of support last week, climbing back 22 cents by Sept. 9 from the Aug. 26 low of $3.85. Relying largely on 14,200 producer surveys in August, the August WASDE report estimated a 15.147-billion-bushel (bb) corn crop, based on a record yield of 183.1 bushels per acre (bpa). USDA's 90% confidence interval for August estimates pegged the crop somewhere between 14.1 bb and 16.2 bb, highlighting how loose production estimates this early in the season can be.

The expected margin of error for USDA's September estimate narrows a little, but the estimate doesn't have much practical use until October, the same time prices typically make their harvest lows. Thursday's September estimate primarily gets attention because it includes yield data from field plots for the first time of the season. The other lingering issue is that we still don't have a good assessment of how many crops were damaged by numerous bouts of severe weather earlier this season. Attention on USDA's harvested corn acres estimate will likely continue into the January report.

Dow Jones' survey of analysts expects USDA to estimate a 15.154-bb corn crop in 2024, based on a record yield of 182.7 bpa, down from last year's record crop of 15.342 bb. U.S. ending corn stocks in 2024-25 are expected to be cut from 2.073 bb to 2.009 bb, still the highest in six years, if true. There is plenty of reason to believe demand for cheap, old-crop corn has been strong in the past two months.

Dow Jones expects USDA to lower its estimate of world ending corn stocks in 2024-25 from 310.17 million metric tons (mmt) to 309.00 mmt, not much different from the previous three years. There is a chance USDA may lower its 51.0-mmt corn production estimate for Argentina, as farmers continue to have concerns about leafhoppers in the new season.

SOYBEANS

Similar to corn, November soybean prices have also been on a downhill slide this summer, encouraged by USDA's August estimate of a record-high 4.589-bb soybean crop and record 53.2-bpa yield. Crop conditions have turned drier lately, but August temperatures were surprisingly mild as La Nina delayed its long-expected arrival. Analysts in Dow Jones' survey expect USDA to increase its soybean crop estimate from 4.589 bb to 4.609 bb with a record yield of 53.4 bpa. For the record, USDA's 90% confidence interval for soybean production estimates is not very good in August or even September at plus or minus 8.8%. Historically, USDA has had much better luck with its soybean estimates in October, showing a 90% confidence interval of plus or minus 4.2%. With increased production expected, Dow Jones expects USDA's estimate of U.S. ending soybean stocks to be raised from 560 million bushels (mb) to 584 mb, still the highest in six years.

In addition to the possibility of a record U.S. soybean crop in 2024, another bearish shadow looming over prices is the possibility of a record soybean crop in Brazil in early 2025. After several months spent in its dry season, Brazil is currently too dry for soybean planting to commence, and producers are watching for the arrival of the wet season. But this year's start may be later than usual. USDA currently estimates Brazil's new soybean crop at 169.0 mmt, or 6.21 bb, a big pile of competition for the U.S., if weather eventually cooperates.

Dow Jones expects USDA to slightly trim its estimate of world soybean stocks in 2024-25 from a record-high 134.30 mmt to 134.20 mmt, or 4.93 bb, a new season that looks initially bearish and has a long way to go.

WHEAT

USDA is not expected to make any changes to its 1.982-bb estimate of U.S. wheat production in 2024, as the next production estimate will come from the Small Grains Summary on Sept. 30. The current estimate is for the largest U.S. crop in eight years and is based on a national yield of 52.2 bpa. In August, USDA expected 828 mb of U.S. ending wheat stocks in 2024-25, the most in four years. But so far in the new season, wheat export sales are up 31% from a year ago, suggesting a boost in the export demand estimate may be in order.

Dow Jones' survey expects USDA to slightly lower its estimate of U.S. ending wheat stocks from 828 mb to 820 mb. USDA's estimate of world ending wheat stocks is also expected to be reduced slightly, from 256.62 mmt to 255.80 mmt, or 9.40 bb, the lowest in nine years.

Outside the scope of Thursday's report, wheat traders are already starting to notice dry early conditions for winter wheat planting in the U.S. and Black Sea region.

Later Thursday, USDA's Farm Service Agency will also release its second round of estimates of prevented planting acres for 2024 at https://www.fsa.usda.gov/….

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

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

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