USDA Reports Preview

In its Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports on Monday, Aug. 12, USDA will offer new production estimates of corn, soybeans and wheat based on producer surveys, weather data and a review of harvested acre data from the Farm Service Agency and Risk Management Agency. In the case of winter wheat, field-based yield data will also be included.

The reports will be released at 11 a.m. CDT.

CORN

You can't blame inflation on farmers, as December corn is trading near its lowest December prices in over three-and-a-half years, and cash prices are over a dollar a bushel below USDA's estimated production cost. With futures funds holding 300,310 contracts of corn net-shorts as of July 30, it would be reasonable to expect a much larger corn production estimate from Dow Jones' survey of 17 analysts, but that is not what we find. The survey expects USDA to estimate a 15.103-billion-bushel (bb) corn crop, based on a record yield estimate of 182.1 bushels per acre (bpa) and assuming USDA will cut its estimate of harvested acres by a half-million, to 82.9 million acres.

On July 31, USDA's National Agricultural Statistics Service (NASS) let it be known that it would review "all available data," including producer surveys and the latest information from the Farm Service Agency and Risk Management Agency records and, if justified, will publish updated estimates of harvested acres for corn, soybeans and wheat in the Aug. 12 Crop Production report. Given the numerous incidents of severe weather, hail, wind damage and flooding that have occurred since late April, Monday's estimate of harvested corn acres should get plenty of attention and has a chance to trim back the corn production estimate.

Analysts surveyed by Dow Jones also expect USDA to slightly lower its estimate of U.S. new-crop ending corn stocks from 2.097 bb to 2.092 bb, an estimate that remains the highest in six years, if true. Demand for corn at these cheap summer prices has been active, and an adjustment on the demand side could tweak ending stocks a little lower.

Dow Jones expects USDA to slightly lower its estimate of world ending corn stocks for 2024-25 from 311.64 million metric tons (mmt) to 311.2 mmt, or 12.25 bb, staying similar to where supplies have been the past four years. USDA's 122.0 mmt corn production estimate for Brazil in 2023-24 remains suspiciously high, but it is difficult to know what it would take for USDA to lower it, as the safrinha harvest is almost over.

SOYBEANS

Similar to corn, November soybean prices are trading near their lowest levels in over three-and-a-half years, and cash prices are almost $2 a bushel lower than USDA's production cost estimate for 2024. Once again, futures funds have ridden the trend down and are sitting with 169,679 net shorts in soybeans as of July 30, not far from the largest short position for funds soybeans have ever seen.

With USDA awarding the national soybean crop a 68% good-to-excellent rating on Aug. 5 and crops enjoying mild August temperatures while setting and filling pods, one might expect a record soybean crop in 2024. So do analysts surveyed by Dow Jones, by a tiny margin. The average survey estimate expects 4.469 bb of soybean production, just above the old record of 4.464 bb from the 2021-22 season. The survey also expects USDA to estimate yield at 52.5 bpa, assuming 85.1 million harvested acres, down only 200,000 acres from USDA's current estimate of 85.3 million. At the time of the June Acreage survey, USDA reported 73.3 million acres of soybeans were planted and estimated 86.1 million acres would eventually be planted, so there is room for a possible surprise in Monday's new estimates.

For U.S. new-crop ending soybean stocks, Dow Jones' surveyed analysts expect USDA to increase the estimate from 435 million bushels (mb) to 472 mb, largely a reflection of the higher production estimate. If true, it will still be the highest ending soybean stocks in five years.

The anticipation of a record level of world soybean stocks in 2024-25 has also been hanging over soybean prices and, if Dow Jones' survey is correct, that won't change Monday. USDA is expected to slightly lower its estimate of world soybeans stocks in 2024-25 from 127.76 mmt to 127.60 mmt, or 4.69 bb. The expectation of larger supplies is largely based on Brazil having a 6.21 bb soybean crop (169.0 mmt), a crop that will start planting in September.

WHEAT

Rounding out this summer's bearish trifecta, U.S. wheat prices are also near their lowest levels in over three years with futures funds holding large net-short positions in all three U.S. contracts. There is a chance USDA's wheat production estimates could be lowered for Europe, Ukraine and Russia on Monday, but the production estimate for the U.S. is apt to be raised. Analysts surveyed by Dow Jones expect USDA will slightly increase its estimate of world ending wheat stocks from 257.24 mmt to 257.30 mmt, or 9.45 bb. The bullish view is that world wheat supplies are at their lowest level in nine years. The bearish view, however, is that between Russia's production and futures funds, there has been enough selling to hold prices down.

For the U.S., ending wheat stocks in 2024-25 are expected to be slightly increased from 856 mb to 860 mb, still a five-year high, if true. One bullish surprise for wheat in the new season has been a better start for U.S. export sales. As of Aug. 1, there were 316 mb of U.S. wheat export sales on the books, 34% more than this time a year ago.

Analysts surveyed by Dow Jones expect USDA to increase its estimate of U.S. wheat production from 2.008 bb to 2.016 bb, but an even higher estimate is possible, as winter wheat harvest anecdotes have mentioned big yields, and USDA will have its own field-based yield data to rely on this month. Spring wheat ratings are also especially high in North Dakota and Minnesota and point to a bigger harvest than in recent years.

Dow Jones production estimates for wheat show a slight increase in every category and are broken out as 1.348 bb for winter wheat, 766 mb for hard red winter wheat, 345 mb for soft red winter wheat, 237 mb for white wheat, 580 mb for other spring wheat and 90 mb for durum wheat.

Later Monday, USDA's Farm Service Agency will also release its first 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 Monday, Aug. 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 Monday's August WASDE report webinar: https://www.dtn.com/….

U.S. PRODUCTION (Million Bushels) 2024-25
	Aug	Avg	High	Low	Jul	2023-24
Corn		15,103	15,284	14,920	15,100	15,342
Soybeans		4,469	4,537	4,396	4,435	4,165
All Wheat		2,016	2,035	1,982	2,008	1,812
Winter		1,348	1,396	1,329	1,342	1,248
HRW		766	788	755	763	601
SRW		345	349	340	344	449
White		237	280	224	234	198
Other Spring		580	600	540	578	505
Durum		90	95	88	89	59
U.S. ENDING STOCKS (Million Bushels) 2023-24
	Aug	Avg	High	Low	Jul
Corn		1,882	1,977	1,825	1,877
Soybeans		347	360	332	345
Wheat		702	705	702	702
U.S. ENDING STOCKS (Million Bushels) 2024-25
	Aug	Avg	High	Low	Jul
Corn		2,092	2,295	1,987	2,097
Soybeans		472	540	396	435
Wheat		860	876	830	856
WORLD ENDING STOCKS (million metric tons) 2023-24
	Aug	Avg	High	Low	Jul
Corn		309.7	313.5	308.0	309.1
Soybeans		110.9	112.5	108.8	111.3
Wheat		261.0	262.0	260.0	261.0
WORLD ENDING STOCKS (million metric tons) 2024-25
	Aug	Avg	High	Low	Jul
Corn		311.2	315.0	307.0	311.6
Soybeans		127.6	130.5	125.6	127.8
Wheat		257.3	260.0	254.0	257.2

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

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