Fundamentally Speaking

The outlook for U.S. row crops may be as price negative as has been seen for a while for even with corn plantings seen down 4.6 million acres from last year, a record yield forecast of 181 bushels per acre (bpa) along with just tepid demand is seen leading to a 2.0 billion bushel-plus carryout.

A similar situation for soybeans with also a record USDA yield projection of 52 bpa along with seedings seen 3 million bushels above the 2023 level, but there are also many questions on the consumption side of the equation.

Along these lines this chart shows the USDA's May WASDE old crop and first new crop stocks-to-use ratios for U.S. corn and soybeans.

The latest 2023/24 stocks-to-use ratio for corn is 13.8% and that is the highest old crop corn ratio for the May WASDE since 2020.

The 8.3% stocks-to-use ratio for old crop soybeans is the highest for this month also since 2020.

As for new crop, the USDA's first stab as the 2024/25 corn stocks-to-use ratio is 14.2%, and though down from the year ago initial ratio of 14.2%, is above the 2000-2024 average of 13.5%.

The new crop soybean stocks-to-use ratio is projected at 10.2% which is the highest initial forecast since 2019 and about equal to the 2000-2024 average.

Whether the final 2024/25 stocks-to-use ratios will come above or below these projections remains to be seen and will be a function primarily of weather and future demand, though we are seeing the best spring moisture profile in the key corn and soybean growing areas since 2020.

Limited purchases of U.S. ag products by China suggests the final stocks-to-use figures maybe larger.

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