Corn demand lowering new crop carryout estimates

The USDA’s October WASDE report didn’t throw too many curveballs this month, leaving the grain markets only moderately lower following Friday’s trade. With 47% percent of the U.S. soybean crop harvested last week and 30% of corn harvested, physical samplings are likely more revealing for the month. 

Corn

The agency confirmed a record U.S. corn yield at 183.8 bushels per acre (bpa), up 0.2 bushels from the September report. Harvested acres were left unchanged at 82.7 million acres, pinning the production forecast at 15.2 billion bushels, the second-largest volume behind 2023. 

On the demand side, the agency raised corn exports by 25 million bushels due to a rapid pace since the start of the marketing year. U.S. corn is becoming notably cheap compared to other international sources, supporting export demand. Old crop corn demand was raised to reflect the Quarterly Grains Stocks report released last month, resulting in lower beginning stocks for the 2024/25 season.

The new crop corn carryout forecast was lowered to 2 billion bushels (1.999 billion, to be more exact). The old crop carryout also worked lower to 1.76 billion bushels. Months ago, the expectation was the U.S. would end both marketing years above 2 billion bushels. 

Expectations still call for burdensome supplies. However, demand has been doing its job to make incoming supplies less burdensome for the market, thanks to ethanol production and exports.

The global balance sheet tightened this month, with ending stocks forecast 1.8 million metric tons lower than in September from lowered Black Sea production.

Soybeans

The USDA offered a slight cut in the U.S. soybean yield forecast, reducing productivity by 0.1 bushels. Yields are still projected at 53.1 bpa, leaving production forecasts at a record 4.6 billion bushels. 

Despite market expectations leaning toward mostly unchanged yields, the slight reduction was not surprising considering dry conditions in the Eastern Corn Belt during pod-filling.

Lower production estimates were offset by slightly higher beginning stocks and lower residual usage. The export and crush forecasts were unchanged from the previous month, which left the carryout estimate at 550 million bushels. 

The global balance sheet experienced a slight supply boost due to higher stocks in China, Argentina, and Brazil.

Wheat

The USDA revised its 2024 wheat production forecast to 1.971 billion bushels, down 11 million to reflect the NASS Small Grains Annual Summary released last month. The agency raised wheat imports by 10 million bushels, noting a solid pace of imports since June.

Domestic usage was raised by 10 million bushels for higher feed and residual usage, while exports were unchanged for the month. 

Wheat endings stocks for 2024/25 were probably the most friendly part of the report, coming in lower than expected at 812 million bushels. Still, the carryout estimate was 17 percent higher than the previous year. 

World wheat stocks were raised by 0.5 million metric tons but are expected to be the lowest in nine years. 

Headline ending stocks results from the October WASDE report.

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