The U.S. Department of Agriculture (USDA) released a slew of market reports on Friday (Jan. 10), leading to a big day for the grains. The USDA issued six crop reports on Friday - its Cotton Ginnings, Crop Production, Grain Stocks, Rice Stocks, and Winter Wheat/Canola Seedings, all factoring into the World Agricultural Supply and Demand Estimates (WASDE) report.
The January data tump is typically a market mover, as the USDA attempts to put a bow on the previous growing season for corn and soybeans.
USDA slashes corn and soybean yield projections
Grabbing the most attention on Friday were the final corn and soybean yield numbers. The agency cut the average national corn yield by 3.8 bushels per acre (bpa) to 179.3 bpa. That is still a national record. However, lower harvested acres this year brought the final corn production number to 15.1 billion bushels.
Corn yields are estimated to be a record this season in Iowa, Illinois, and South Dakota. Meanwhile, yields are lower year-over-year in Minnesota, Ohio, and Indiana due to drier conditions.
Soybean yields were cut by a whole bushel, bringing the final estimate to 50.7 bpa (up 0.2% year-over-year) and a far cry from the record 53.2 bpa the USDA had forecasted in August and September. Final production is estimated at 4.366 billion bushels.
When compared to last season, Iowa soybean yields were up from a year ago (+1.6%), as well as Illinois (+3.4%). Indiana yields were down from last year (-3.3%), as well as Minnesota (-6.3%) and Ohio (-13.8%).
The 2024/25 corn carryout is forecast at 1.54 billion bushels, compared to the average analyst guess of 1.674 billion. Soybean ending stocks lowered by 90 million bushels and projected at 380 million, compared to market expectations of 458 million. Lower-than-expected carryouts were more than enough to boost corn and soybean futures on Friday, with follow-through buying carrying into Monday. Wheat ending stocks were raised by 3 million bushels to 798 million.
In its quarterly stocks report, the USDA estimated Dec. 1 on and off-farm storage was at 12 billion bushels, down 0.8% from the same period last year. Inventories came in lower than expected. The USDA estimates that soybean stocks totaled 3.1 billion bushels as of Dec. 1, up 3.3% year-over-year, according to the quarterly stocks report. Inventories were below market expectations of a 210-million bushel increase. Wheat on and off-farm storage at 1.57 billion bushels, up 10% from a year ago.
Cotton hit with bearish numbers
The WASDE report was less friendly to the cotton market. The agency forecasts 2024/25 production at 14.41 million bales, up 159,000 from the previous report. The increase was due to higher harvested acreage in the Southwest.
On the demand side, exports are forecast at 11 million bales, down 300,000 from the December report. Higher supply and lower demand pin the U.S. outlook far away from a tight balance sheet. The stocks-to-use ratio is at 37.5%, the highest since a record 41% was set in the 2019/20 season.
Global ending stocks were increased by 1.9 million bales due to higher supplies in the U.S., China, Australia, and India. Global demand is lower, especially from China, which has been a contention point for U.S. exports. The USDA reported that export sales rose last week but remained at a poor pace due to the absence of China.
Winter wheat seedings report more benign
The USDA’s Winter Wheat Plantings report forecasts seedings for the 2025 crop at 34.1 million acres, up two percent from 2024 but down seven percent from 2023. The forecast also came in higher than market expectations due to higher SRW wheat plantings in Michigan and Ohio, as well as large increases in HRW acreage in Montana and Texas.
More: Check out Trader PhD's latest CommodityChat episode, giving a breakdown of the report.
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