USDA Report Preview

On Thursday, April 10, USDA will release its latest World Agricultural Supply and Demand Estimates (WASDE) report. Traders, at least for a moment Thursday morning, will turn their attention back to fundamentals, which have mattered very little to the markets as of late.

CORN

At the time of writing this on Tuesday, May corn futures are trading at $4.65 1/4, exactly a nickel less than the closing price on March 11, the previous WASDE release date. One might assume, given that small change in price, that the past month must have been awfully slow for market news. I suppose this would be a half truth. On the one hand, USDA hasn't changed its domestic supply and demand estimates for corn in three months, leaving traders uncertain of fair price direction. This has also been complicated by what would typically be significant market-moving events -- such as USDA estimating this spring's corn plantings at 95.3 million acres (ma), the largest in over a decade if accurate, as well as the Trump administration launching its trade agenda with widespread tariff policy. Still, corn prices have shown great resiliency to remain very near to support at and above the mid-$4.50s, while being equally unwilling to get too bullish with many uncertainties still lying ahead.

For the third consecutive WASDE, traders will look to USDA for an update on the corn demand situation, and for the third consecutive WASDE, analysts again expect to see a reduction in U.S. corn ending stocks. According to the Dow Jones pre-report survey of 17 analysts, the average guess for Thursday's report is for U.S. corn ending stocks to come in at 1.506 billion bushels (bb). This would be a reduction of 34 million bushels (mb) from the previous WASDE's estimate, which has stood since Jan. 10. In fact, 13 of the 17 analysts who send in forecasts are predicting a stocks reduction on Thursday, with only two predicting larger ending stocks and two that are even with the current USDA estimate of 1.54 bb. Once again, increased corn exports are the most likely way USDA would accomplish a drawdown in U.S stocks. In their most recent report, the Foreign Agricultural Service (FAS) reported 2024-25 corn export commitments at 24% above 2023-24 through March 27, with the current USDA estimate for exports of 2.45 bb being equal to a 7% increase year over year.

On the world balance sheet, the average of analysts' estimates is also calling for a reduction in corn stocks from 288.9 million metric tons (mmt) in the March report, down to 288 mmt. Of course, in the world corn market, traders will be mostly interested in South American production estimates. In Brazil, corn growing conditions have been mixed through the first part of the safrinha growing season, primarily in the east and south where rainfall has been irregular. However, the most important weather of the season is just around the corner as most Brazilian corn will pollinate through the middle of April and even into early May. For this reason, we may see USDA hold off on adjusting corn estimates. That is at least how the Dow Jones survey sees it with the average analyst estimate coming in at 126.1 mmt for Brazilian corn production, pretty much even with the current USDA estimate. Interestingly, Brazilian agency CONAB will also release its April crop report on Thursday morning. For reference, CONAB estimated corn production at 122.76 mmt in its March report. Corn estimates in Argentina are even more divisive, as traders are still attempting to sort out what consequences the very hot and dry December and January may have had on corn yields. The corn harvest was reported to be 20% complete last week, and conditions, according to the Buenos Aires Grain Exchange (BAGE), have steadily improved since early February. Other Argentina-based Rosario Grain Exchange estimated corn production last month at 44.5 mmt, while BAGE has remained steady in its estimate at 49 mmt. For Thursday, analysts expect USDA to be closer to the BAGE estimate with the average expectation being 49.3 mmt.

SOYBEANS

Up until last week, soybean prices were trending higher since the last WASDE report, finding a spark following a lower-than-expected 83.5-million-acre plantings estimate from USDA at the end of March. However, the onset of the second trade war with China last week sent May prices collapsing 52 1/2 cents in two sessions, although prices have stabilized somewhat to begin this week's trade.

Thursday's report is expected to be mostly quiet for soybeans. In USDA's most recently published data for February, crush volumes relaxed slightly off their historically strong pace seen through the first five months of the marketing year. However, total pace through February remains 5.3% above 2023-24 and even with USDA expectations for the marketing year. March is also typically a strong month for crush, so at this point in early April, I expect USDA to leave its crush estimate unaltered. As for soybean exports, since tapering off to begin 2025, the pace of sales and shipments has remained mostly steady at a combined 14% above 2023-24 as of March 27, the most recent FAS data. USDA's current estimate is for an 8% increase year over year. The argument could be made for a slight revision higher. But given the current strain in U.S. trade relationships (particularly with China) as well as Brazil's monumental export performance in March, I would not be surprised to see USDA play this one extremely cautiously on Thursday. The analysts surveyed by Dow Jones seem to agree with the average trade guess for Thursday's soybean stocks reported at 381 mb, which would be just 1 mb higher than the current USDA estimate. In fact, only two out of 17 firms surveyed expect a decrease in 2024-25 soybean stocks on Thursday.

On the world soybean balance sheet, USDA will take another look at Brazilian production. At this point, estimating Brazil's output is likely a case of arguing which record is higher. With most of the harvest complete -- except for southern areas -- all signs point toward a historic soybean crop. The southernmost growing areas do have some issues because of a very hot and dry February and March, but thus far, yields have overperformed in the central growing areas. For reference, Brazilian agency CONAB reported production for the country last month at 167.4 mmt. The analysts surveyed for Thursday on average are preparing for USDA to hold its estimate at 169 mmt. In Argentina, rainfall was very timely to benefit most of the crop through pod setting and filling, although the northern areas remain worrisome. Analyst opinions are more mixed on Argentina's crop, likely to do with hardly any harvest activity thus far to guide estimates. But the average guess is for 48.7 mmt of production, just fractionally less than USDA's 49 mmt.

WHEAT

Since the last WASDE report, wheat futures have traded with mixed results. A brief weather-related rally in hard red Kansas City futures was rejected, and prices accelerated lower through the latter half of March, culminating with Chicago and Minneapolis contracts setting new contract lows for their May contracts. The most recent CFTC data from last Friday showed the combined noncommercial net short as of April 1 at a record 162,000 contracts. Still, there are a few bullish points to be made. On March 31, USDA estimated 2025 total wheat acres in the U.S. at just 45.4 million, the second lowest since 1919 if accurate. Although the market feels more interested at this point in new-crop wheat, Thursday will focus on the old-crop situation for one more round.

On the U.S. balance sheet, increased imports and decreased exports contributed to a 25 mb increase in ending stocks in the March WASDE and are the likely suspects to alter the balance sheet on Thursday. Imports for the marketing year now stand at an estimated 140 mb, the largest since 2017-18. Perhaps the weakening U.S. dollar is slowing this pace through the final two months of the marketing season. The export pace for wheat remains frustratingly slow despite the affordability of U.S. wheat in the world marketplace. The commitment pace is lagging USDA's revised estimate of 835 mb of exports, which may set up exports for another revision lower on Thursday. The Dow Jones survey expects the resulting ending stocks in 2024-25 for all U.S. wheat to total 822 mb, an increase of 3 mb from the March USDA estimate.

On the world balance sheet, analysts are also expecting a slight increase to world stocks, with the average estimate coming in at 260.8 mmt, which would be a 700,000 mt increase from March. Russian exports seem like a category likely to receive another reduction, as USDA has been slowly but surely trimming back its estimate. However, private analytics group SovEcon remains much lower with its estimate of 40.7 mmt of Russian exports compared to USDA's 45 mmt. Recent harvesting countries Argentina and Australia received large adjustments higher in March and will warrant monitoring for fine tuning from USDA on Thursday. Otherwise, China's import levels are always worth keeping an eye on and have been slipping through the marketing season thus far.

Join us for DTN's webinar at 12:30 p.m. CDT Thursday, April 10, as we discuss USDA's new estimates considering recent market events. Questions are welcome, and registrants will receive a replay link for viewing at their convenience. Register here for Thursday's April WASDE report webinar here: https://www.dtn.com/….

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U.S. ENDING STOCKS (Million Bushels) 2024-25
	Apr	Avg	High	Low	Mar	2023-24
Corn		1,506	1,605	1,405	1,540	1,763
Soybeans		381	413	320	380	342
Wheat		822	854	795	819	696
WORLD ENDING STOCKS (million metric tons) 2024-25
	Apr	Avg	High	Low	Mar	2023-24
Corn		288.0	290.0	285.0	288.9	314.0
Soybeans		122.0	124.0	121.0	121.4	112.6
Wheat		260.8	262.0	259.8	260.1	269.5
WORLD PRODUCTION (million metric tons) 2024-25
	Apr	Avg	High	Low	Mar	2023-24
CORN
Argentina		49.3	51.0	48.0	50.0	51.0
Brazil		126.1	129.7	124.0	126.0	119.0
SOYBEANS
Argentina		48.7	49.5	47.5	49.0	48.2
Brazil		168.9	170.0	167.5	169.0	153.0

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

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