USDA Reports Preview

Tuesday, March 11, USDA will release the March edition of the World Agricultural Supply and Demand Estimates (WASDE) report. Traders will be interested in South American production as well as U.S. demand estimates, but overall Tuesday's report arrives as a welcomed reprieve from the whirlwind of trade policy that has dominated and battered markets over the past two weeks.

CORN

The corn market had been steadily drifting higher since late fall with very little disturbance to the rally, up until the last week or so of February, when nervous traders holding their longest position in corn futures since spring of 2022 began to hit the sell button. What ensued was the largest weekly selloff in May corn futures since the contract's earliest trading days back in late June 2023. Prices have recovered somewhat over the past two sessions after compromises were made by the U.S., Canada and Mexico regarding tariff-free trade in accordance with the USMCA agreement. The trade remains very uneasy with bullish traders looking to Tuesday's report for reassurance following last week's price plunge.

On the domestic balance sheet, the main bucket of interest will be corn exports, where the pace at the halfway point of the 2024-25 marketing year remains very stout at 26% more commitments as compared to this time in 2024. The USDA is still penciling a 7% increase in year-over-year exports, a figure that was left unchanged last month to the frustration of bullish traders. According to the Dow Jones pre-report survey of 16 analytic firms, the average trade guess is calling for 1.523 billion bushels (bb) of ending stocks in Tuesday's report, a moderate decline from February if true. Increased exports seem like the most likely way the government could accomplish this reduction in stocks, but strong corn usage for ethanol at 2% higher year-over-year may also be a candidate.

On the world balance sheet, South American production will again be of keen interest to traders. Following a very dry end to 2024 and start to 2025, recent conditions in Argentina have reversed course and turned very wet over the past two weeks. In fact, since the previous WASDE report which saw USDA cut Argentine corn production by 1 million metric ton (mmt), corn rated normal to excellent by the Buenos Aires Grain Exchange (BAGE) fell 7 points through the first half of February but has since recovered 4 points, but still overall rated 16% lower than in 2024. There was likely still damage done to yield potential in January that is yet unaccounted for by USDA, as reflected in the Dow Jones survey where the average analyst expectation is for an additional 1 mmt cut in corn production in Argentina. As for Brazil, the USDA somewhat surprised the market with a 1 mmt cut to production expectations in the February WASDE, perhaps the result of what was at the time a very slow start to the safrinha planting season. Throughout February, the weather in central Brazil became ideal and planting pace mounted an impressive recovery to overtake the five-year average by the end of the month. As a result of this and good precipitation to get the crop started, USDA may opt to hold this estimate steady until more of the growing season passes. The Dow Jones survey agrees, with the average analyst calling for a fractional increase to 126.2 mmt for Brazilian corn production.

SOYBEANS

Prior to the February WASDE, the soybean market was already top heavy, and the overall neutral report did nothing to support prices as it simply reconfirmed very large production out of South America, even with a 3-mmt cut to Argentine production. In late February, losses accelerated as a result of increased trade tensions with Mexico, Canada and China.

This time around, on the domestic balance sheet, the market is again expecting a quiet report for soybeans. The average analyst estimate for soybean ending stocks is for a 1-mb increase to 381 mb. Currently, the demand situation for soybeans is a two-way street, where going one direction is crush pace, which continues to impress and is running ahead of the USDA's record expectations through January, but heading the other way are soybean exports, which have seen commitment pace crumble through 2025 thus far. Total commitments still hold a 13% lead over last year, with the USDA expecting an 8% increase. This may be enough for the USDA to hold off for now on a cut to export demand, but if ending stocks are to rise in Tuesday's report exports appear to be the most likely culprit.

On the world side of things, the recent weather improvement in Argentina is leading some analysts to believe USDA perhaps overdid it in February with a surprising 3-mmt cut, especially considering that week under half of the total soybeans in Argentina were setting or filling pods. The arrival of steady rainfall through February certainly has worked to improve conditions for later-maturing soybeans. However, the analysts surveyed by the Dow Jones are still on average calling for a slight cut to Argentine soybean production to 48.6 mmt, although most of the expectations are for an unchanged estimate.

In Brazil, a sluggish start to soybean harvest in central Brazil gave way to rapid pace recovery through the month of February, and thus far the yield reports there are good. More recently, the market has turned its attention to southern Brazil where full-season soybeans have been subjected to hot and dry conditions over the past week, which are forecast to continue over the next two weeks, especially for southernmost state Rio Grande do Sul, where early yield reports have disappointed. Currently, analysts see the situation in Brazil remaining fairly steady in Tuesday's report at 169.3 mmt average trade guess versus 169 mmt in the February report. Great production in the central areas is likely to offset any potential for losses in the southern growing areas. The bottom line should see world soybean stocks steady near 124 mmt, still a record as estimated.

WHEAT

At this point, three-quarters of the way through the 2024-25 marketing year, the wheat balance sheet estimates likely offer very little room for surprises. Most of the market's attention has already shifted toward new crop where the mid-February cold burst sent wheat prices to their highest level in several months, just to come violently crashing back down as trade fears mounted in late February. Weather is likely to remain the primary driver of wheat prices moving forward, so it is unlikely given what we know currently that Tuesday's report will contain any strong market bias either direction.

On the U.S. balance sheet, the expectation amongst analysts is for a small increase in ending stocks to 796 mb versus 794 mb in February. Wheat exports have been hit or miss through 2025 thus far, but commitment pace currently sits well below USDA's expectations, while shipment pace has slowly declined below the 20% expected increase in wheat exports as well. This may be the place for a demand cut on Tuesday, although we may also see USDA express optimism here with the over 90-cent price decline in U.S. HRW making it among the least expensive offers in the world at this point. Typically, March forward old-crop wheat sales work their way lower, but there is definitely some degree of unpredictability, and it is not unheard of for sales spikes to occur.

On the world balance sheet, all eyes will likely drift again this month to the Russia outlook. The USDA is still estimating total Russian wheat exports for this season at 45.5 mmt, while private analyst groups such as SovEcon are quite a bit lower, at 42 mmt in their late February estimate. The average analyst thoughts on world wheat ending stocks are that they will remain static at 257.5 mmt versus 257.6 mmt in February. At this point, world wheat ending stocks as estimated are often still the tightest in nine years, but the wheat market has often proven that stocks don't hold the same significance in market bias as compared to corn and soybeans, with shifts in supply and demand economics amongst key countries often more important than the overall amount of wheat stocks estimated in the world, as the vast majority of those stocks will never see the open market.

U.S. ENDING STOCKS (Million Bushels) 2024-25
	Mar	Avg	High	Low	Feb	2023-24
Corn		1,523	1,630	1,415	1,540	1,763
Soybeans		381	402	365	380	342
Wheat		796	815	779	794	696
WORLD ENDING STOCKS (million metric tons) 2024-25
	Mar	Avg	High	Low	Feb	2023-24
Corn		290.0	291.6	288.0	290.3	315.8
Soybeans		124.2	125.0	122.2	124.3	112.5
Wheat		257.5	259.3	256.0	257.6	267.5
WORLD PRODUCTION (million metric tons) 2024-25
	Mar	Avg	High	Low	Feb	2023-24
CORN
Argentina		49.0	50.0	47.0	50.0	50.0
Brazil		126.2	130.9	124.0	126.0	122.0
SOYBEANS
Argentina		48.6	49.0	47.5	49.0	48.2
Brazil		169.3	171.0	168.0	169.0	153.0

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Join us for DTN's webinar at 12:30 p.m. CDT Tuesday, March 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 Tuesday's March WASDE report webinar: https://www.dtn.com/…

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

Follow Rhett Montgomery on X @R_D_Montgomery

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