- USDA report lacks surprises with US 2023/24 and 2024/25 stocks little changed; Russian wheat crop cut 5 million mt to 83 million; Midday GFS weather forecast goes wet across NW Midwest with 5-9.00″ of rain.
- The biggest statistical impact of the June WASDE was a cut in 2024/25 non-US wheat supplies of 8 million mt and a drop in world wheat stocks of 1.4 million mt due to a decline in wheat feeding. US corn, soybean and wheat end stocks were little changed, and Chicago market direction hinges upon summer growing weather across the Northern Hemisphere, particularly the US. The report has not caused post report market fireworks and traders will get back to the job ahead, assessing weather and its impact on yield/supply.
- The USDA left US 2023/24 corn end stocks at 2,022 million bu with 2024/25 US corn end stocks at 2,102 million bu. The 2024/25 balance sheet left the 2024 US corn yield at 181 million bu, 4 bushels/acre aboveΩ last year’s record. We expect a 50 million bu increase in 2023/24 US corn feed/residual use and a 25-50 million bu bump in 2023/24 corn exports come July.
- WASDE made no change in its S American corn crop estimates leaving Brazil at 122 million mt and Argentina at 53.0 million, implying that it wants to see actual yield data before making any adjustments. The Brazilian winter corn crop on June 1 was 4% harvested with the second Argentine corn harvest just starting late last week. Downward adjustments are expected in the July WASDE report.
- World 2024/25 corn end stocks were lowered to 310.8 million mt, down 1.6 million from the current crop year. WASDE is forecasting an 8 million mt fall in 2024/25 corn trade which we would doubt based on price and the rising values for world wheat. China is forecast to import 23.0 million mt of world corn in 2024/25, unchanged om the year.
- US 2023/24 soybean end stocks rose 10 million bu to 350 million on a cut of 10 million bu of the US crush rate to 2,290 million bu. US soybean exports were unchanged at 1,700 million bu. We see US 2023/25 soybean exports at 1,675 million or 25 million bu less. No change as made to the 2024/25 US soybean balance sheet, other than adding the 10 million bu of old crop supplies. 2024/25 US soybean end stocks were forecast at 455 million bu with a near record US soybean yield of 52.0 bushels/acre.
- WASDE held its Brazilian and Argentine soybean crop estimates unchanged at 153 million mt and 50 million mt, respectively. CONAB will update their production estimates on Thursday. It is surprising that historical flooding across RGDS, did not cause a downward Brazilian crop adjustment. World 2024/25 soybean stocks are forecast at a large 128 million mt, up 17 million on the current crop year.
- USDA wheat data leans mixed as a hike in US production was more than offset by lower Black Sea/EU crop sizes. World end stocks were trimmed 1.3 million mt to 252.3 million. NASS raised US winter wheat yield to 51.4 bushels/acre, vs. 50.7 in May, and the highest since 2020. Meaningful upward adjustments were made in IN, KS, MI and SD. HRW production is pegged at 726 million bu, vs. 705 million previously, which raises projected HRW end stocks to 350-360 million bu in crop year 2025/25, vs. 270 million in 2023/24. However, SRW production was lowered a net 2 million to 342 million bu, and we would maintain 2024/25 US SRW end stocks drop to 90-95 million bu, vs. 126 million in 2023/24 and which is historically tight. There is not much room for elevated US SRW export demand. 2024/25 US all wheat exports were increased 25 million bu to 800 million as falling non-US production funnels non-traditional demand to the US over time. US end stocks were lowered 8 million to 758 million bu. WASDE’s season average cash price was increased $0.50/bu to $6.50.
- Russian wheat production was lowered 5 million to 83 million mt. Ukrainian production was trimmed 1.5 million mt to 19.5 million. EU production was trimmed 2 million to 130.5 million mt. USDA now projects combined major exporter stocks at 52.6 million mt, the lowest since 2007/08. Stocks will be nearly nonexistent in Australia, Canada and Ukraine, and so there is virtually no tolerance for additional world wheat crop issues.
- The world wheat market will slide into seasonal lows soon and it is Northern Hemisphere weather that determines value into late year. Coming Central US heat is a concern, but weC doubt that premium will be added in bulk until it is seen/felt in the coming weeks. It is all about Northern Hemisphere weather with the US dollar sharply lower on the limited gain in US inflation. Corn should be the upside leader into July with seasonal wheat lows to be posted early in the harvest due to end user demand and tightening exporter stocks/supplies.