News & Resources

USDA Reports Preview

8 Jan 2025

At 11 a.m. CST on Friday, Jan. 10, USDA will release a fresh round of reports providing fundamental updates on a wide range of ag markets. First, the January World Agricultural Supply and Demand Estimates (WASDE) report will revisit U.S. production after those estimates were left unchanged in December. USDA will also report on Dec. 1 grain stocks, giving traders a look into demand for U.S. grains through the quarter running from September through November. Finally, USDA will release its winter wheat seedings for the fall of 2024.

CORN

Corn futures have trended steadily higher since early fall, as prices near the bottom end of the five-year range have spurred extremely strong demand both domestically and abroad. USDA will attempt to estimate just how strong demand was through the first quarter of the corn marketing year on Friday with the release of their grain stocks report. According to the Dow Jones pre-report survey of analysts, the average trade guess for corn stocks as of Dec. 1, 2024, is 12.164 billion bushels (bb). Obviously, there are several moving parts that go into this estimate. First, USDA will look at 2024 production. The same analyst survey estimates, on average, a slight decrease in U.S. production to be reported Friday, at 15.092 bb. Assuming beginning stocks and imports for the marketing year remain the same at 1.760 bb and 25 million bushels (mb), respectively, then this would imply a first-quarter corn usage figure of 4.713 bb, the largest on record if true.

Given what we know thus far through the marketing year, this estimate is a fair assumption if not perhaps on the lighter end of what is realistic. The analog year for comparison is 2021-22, when first-quarter corn disappearance was finalized at 4.645 bb. Looking across the major demand categories, the current season is outperforming in both ethanol and exports through November. The questionable demand bucket and the hardest to estimate is feed and residual, with USDA estimating total marketing-year feed usage for corn to be more than 155 mb higher than 2021-22 at 5.825 bb. USDA is also anticipating higher grain consuming animal units (GCAU) in 2024-25, slightly above last year's total, which equated to a feed and residual usage figure of 5.807 bb. Often the most influential factor in feed usage (and usage in general) is price, with the lowest prices in recent history kindling strong demand for corn for feed.

In world corn fundamentals, traders will undoubtedly be quickly jumping to page 23 of the WASDE report to check for any adjustments made to South American corn production, especially with the concerning dry spell through much of Argentina and southern Brazil over the past couple weeks that will extend through the first half of January. While there is reason to believe areas specifically in the east-central part of Argentina will suffer yield losses due to this stretch of adverse weather, I would not be surprised to see USDA wait to make any considerable adjustments to production estimates until February at the earliest when there will be at least some corn harvesting complete by which to gauge yields.

SOYBEANS

Soybean futures have found a bit of life in recent weeks following a drop to new contract lows in mid-December. The adverse weather in Argentina and southern Brazil has been seen as enough to warrant at least some risk premium in the market. But overall, that is still not seen as overly concerning, especially regarding Brazil's soybean crop. USDA will take a bead on Friday to revisit U.S. soybean production, which has thus far through the fall been cut 125 mb from September through November and obviously left unchanged in the December WASDE. For Friday, analysts are expecting USDA to follow through with another slight cut to production, with the average estimate coming in at 4.451 bb versus 4.461 bb currently, according to Dow Jones.

USDA will then use this production estimate as part of their quarterly grain stocks estimate. According to the Dow Jones survey, the average analyst estimate for soybean stocks as of Dec. 1 is 3.236 bb, 8% above 2023 if true. Using the aforementioned production and assuming steady imports and beginning stocks leaves an implied first-quarter demand figure of 1.572 bb, or 9% larger than 2023, and the largest first-quarter usage in three years if true. This estimate is reasonable considering crush and exports, the two largest demand sources for soybeans, are running at a combined 11% above 2023 through November.

On the world balance sheet for soybeans, the Dow Jones pre-report survey shows analysts expecting a slight increase in world soybean ending stocks up to 132 million metric tons (mmt) from 131.9 mmt in December. This implies an offsetting production increase or demand cut somewhere in the world to the expected U.S. ending stocks decrease. If there is to be an adjustment, Brazil appears to be the obvious candidate for a production increase. USDA has been very steady with their record production estimate through the fall, and while they are not the lowest estimate out there, they are also certainly not the highest, with some private analysts well over 170 mmt. This, combined with the nonthreatening weather through much of the growing season thus far, may be enough to spur a touch-up from USDA in Friday's report.

WHEAT

Friday's round of reports from the government will be unique to wheat in that it will give traders a glance into new-crop 2025 with seedings numbers for winter wheat planted last fall. According to the Dow Jones survey of analysts, opinion is fairly evenly split on whether we will see an increase or decrease in winter wheat plantings compared to 2024. But the average guess is for acres to remain even if not a touch higher compared to a year ago at 33.4 million acres. Since hitting a low in 2020, acres have stabilized in the 33-million range consistently other than 2023, which saw a rush of acreage planted in response to historically high prices as a result of Russia's invasion of Ukraine. Wheat prices up until early summer 2024 were likely encouraging an increase in acreage this fall up until prices plummeted on strong U.S. yields and good world production in general. The sharp drop-off in prices over the U.S. harvest may have served to discourage some fringe acres, leading to the expected even result on Friday.

In terms of the domestic U.S. balance sheet, the consensus among analysts is for an increase in U.S. ending stocks to back above the 800-mb mark. In terms of midyear stocks, analysts are calling for 1.578 bb of wheat on hand as of Dec. 1, according to Dow Jones -- 11% above last year if true. That is using the same assumptions as for corn and soybeans yields and assumed usage through the first half of the wheat marketing year of 1.215 bb, also an 11% increase in demand for the current marketing year compared to last year. Wheat exports through November ran 34% ahead of the prior marketing year, implying higher usage this marketing year is likely. As an added note, I also tend to think we may continue to see imports increase due to the recent strength of the U.S. dollar, which would serve to increase supply to the market.

In the world market, traders will be watching Russian exports closely for any clues that they will struggle to complete the USDA estimate for exports at 47 mmt, a figure that was reduced 1 mmt in the December issue of the WASDE. Otherwise, Argentina and Australia will continue to be of particular interest in Friday's reports due to the seasonality as both countries will be wrapping up wheat harvests in the next month.

**

Join us for DTN's webinar at 12:30 p.m. CST Friday, Jan. 10, 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/….

U.S. PRODUCTION (Million Bushels) 2024-25
Jan Avg High Low Dec 2023-24
Corn 15,092 15,240 14,965 15,143 15,341
Soybeans 4,451 4,539 4,419 4,461 4,162
U.S. AVERAGE YIELD (Bushels Per Acre) 2024-25 (WASDE)
Jan Avg High Low Dec 2023-24
Corn 182.6 183.7 181.3 183.1 177.3
Soybeans 51.6 52.6 51.2 51.7 50.6
WINTER WHEAT ACREAGE (million acres) 2025
Jan Avg High Low 2024
All Winter 33.5 34.4 32.5 33.4
Hard Red 23.8 24.5 23.3 23.8
Soft Red 6.2 6.5 5.7 6.1
White 3.5 3.6 3.4 3.5
QUARTERLY STOCKS (million bushels)
12/1/24 Avg High Low 9/1/24 12/1/23
Corn 12,164 12,320 11,912 1,760 12,171
Soybeans 3,236 3,587 3,040 342 3,001
Wheat 1,578 1,638 1,460 1,986 1,421
U.S. ENDING STOCKS (Million Bushels) 2024-25
Jan Avg High Low Dec
Corn 1,678 1,815 1,540 1,738
Soybeans 454 486 390 470
Wheat 807 830 792 795
WORLD ENDING STOCKS (million metric tons) 2024-25
Jan Avg High Low Dec
Corn 295.0 297.1 290.5 296.4
Soybeans 132.0 133.0 130.0 131.9
Wheat 258.2 259.0 256.5 257.9

Rhett Montgomery can be reached at rhett.montgomery@dtn.com

Follow Rhett Montgomery on X @R_D_Montgomery