USDA Reports Preview

USDA is set to release its October Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports at 11 a.m. CDT on Friday, Oct. 11.

USDA's corn and soybean production estimates have a history of turning more accurate in October, but on the other side of the coin, harvest is well underway, prices are already anticipating new supplies and traders are looking ahead to South American crops.

Here is a closer look at what to watch for in each crop in Friday's reports.

CORN

The past six weeks have seen a modest rally in December corn prices from the August low of $3.85, but the anticipation of a big U.S. harvest is keeping prices near their lowest level in four years for this time of year. In the September WASDE report, USDA estimated a 15.186-billion-bushel (bb) corn crop with a record yield of 183.6 bushels per acre (bpa). For Friday, Dow Jones' pre-report survey of 19 analysts expects USDA to trim the production estimate to 15.158 bb with a record yield of 183.4 bpa.

Because September corn stocks came in 93 million bushels (mb) below analysts' estimates on Sept. 30, the same group now expects USDA to reduce its estimate of U.S. ending corn stocks by 117 mb to 1.940 bb for 2024-25, still the most in six years, if true. It is early in the new season, but USDA may make some minor tweaks to demand, as export sales are off to a good start, up 14% from a year ago at this time. For the 2023-24 season that just ended in August, corn stocks should total 1.760 bb, the highest in four years.

USDA's estimate of world ending corn stocks is expected to be lowered from 308.35 million metric tons (mmt) to 306.90 mmt, or 1.21 bb, partly reflecting changes in the U.S. USDA may not adjust its South American production estimates this early, but there is room for Argentina's estimate to be lowered on a smaller planting area. Both Argentina and Brazil have experienced dry weather early and Brazil's safrinha corn crop is at risk of being planted later than usual in early 2025.

SOYBEANS

In September, USDA estimated a record-high 4.586 bb soybean crop, based on a record yield of 53.2 bpa. August weather was generally favorable for this year's soybean crop, and early anecdotes have suggested higher yields. However, a stretch of dry weather started in late August that is expected to last another 10 days or more. As of Oct. 6, USDA said harvest was 47% complete, making faster-than-normal progress as producers try to avoid further moisture loss in their beans. Dow Jones' survey expects USDA will lightly trim its estimate of U.S. soybean production to 4.572 bb with a yield of 53.0 bpa, still a record high, if true.

Thanks to the Sept. 30 stocks report, we know the 2023-24 season should end with 342 mb of U.S. soybean stocks, the most in four years. For 2024-25, USDA is expected to slightly reduce ending stocks from 550 mb to 542 mb, the most in six years and the main bearish reason for this year's lower soybean prices.

U.S. soybean exports in 2024-25 will largely depend on the size of Brazil's soybean crop in early 2025. Early conditions in central Brazil have been dry, but rain is expected to arrive late this week, and it looks like planting will start two weeks later than normal. Brazil's soybean crop can still do well but will need its usual rainy season pattern to cooperate. USDA's snapshot estimate of world soybean stocks at 134.58 mmt is expected to be shaved to 134.30 mmt, or 4.93 bb, still a record-high level. USDA's record-high 169.0 mmt, or 6.21 bb, production estimate for Brazil in 2024-25 is also weighing on soybean prices and probably won't be changed Friday. Conab's first production estimates for the 2024-25 season will be released on Tuesday, Oct. 15.

WHEAT

Here in early October, there is attention on planting conditions for winter wheat in the Northern Hemisphere and crop conditions for developing wheat in Argentina and Australia. Friday's WASDE report may have some small adjustments for the 2024-25 season but won't address the new 2025-26 season until May 2025.

Thanks to USDA's Small Grains Summary on Sept. 30, USDA's new production estimate for U.S. wheat should be trimmed Friday from 1.982 bb to 1.971 bb. Dow Jones' survey expects USDA to slightly lower its estimate of U.S. ending wheat stocks for 2024-25 from 828 mb to 821 mb, still the most in four years, if true. U.S. wheat export sales are doing well so far in the new season and are up 23% currently from a year ago. USDA may want more time, however, before making any changes to wheat's demand estimates.

For world ending wheat stocks, USDA is expected to slightly lower the 2024-25 estimate from 257.22 mmt to 256.4 mmt, or 9.42 bb, the lowest in nine years, if true. The description sounds bullish at first blush, but Russia's production has been large enough to dominate world wheat exports for the past five years and has kept prices painfully low for U.S. producers the past two years.

Beyond Friday's report, wheat traders are already starting to notice dry early conditions for winter wheat planting in the U.S. with another dry forecast the next 10 days or more. Western Ukraine received beneficial rain over the weekend, but forecast amounts remain light for new winter wheat in eastern Ukraine and Russia.

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Join us for DTN's webinar at 12:30 p.m. CDT on Friday, Oct. 11, as we discuss USDA's new estimates in light of recent market events. Questions are welcome, and registrants will receive a replay link for viewing at their convenience. Register here for Friday's October WASDE report webinar: https://www.dtn.com/….

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

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