The dog days of summer are seemingly coming to an end as grain and oilseed futures come off their contract lows.
With farmer selling slowing, speculative short-covering has helped push corn and soybean prices higher recently, leaving December corn and November futures around $4 and $10 a bushel, respectively.
More positive price action comes as the USDA will release its September WASDE report on Thursday, the first report since the 2024/25 marketing year began following the Labor Day weekend.
This month’s report will include physical sampling from the USDA for the first time this season. The agency will still include farmer-based surveys, crop conditions, and satellite readings.
CORN
A monthly Bloomberg survey predicts the 2024/25 corn carryout will be lowered by 40 million bushels from August to 2.033 billion. The projected decrease in the USDA’s forecast will likely come from a downward revision in production due to slightly lower yields.
Otherwise, corn yields could stay around their record at 183.1 bushels per acre (bpa) and leave production around 15.1 billion bushels.
Last month, the USDA provided a much-anticipated cut in planted and harvested acres, which is only reserved for the August report when there are major issues. The Farm Service Agency will release its Acreage Certification Update report on Thursday, which could be factored into an update to acreage for corn and soybeans.
However, market expectations are not factoring in an acreage adjustment this month, and another one might not come until October or January, if at all. The market still seems comfortable with harvested acres at 82.7 million, considering the currently large carryout estimates.
SOYBEANS
Traders expect soybean ending stocks to come in on the bearish side again this month and are expected to rise by 8 million bushels from August to 568 million. Last month, the USDA pinned the 2024/25 carryout at the highest since the 2018/19 marketing year, versus expectations predicting stocks at the highest since 2019/20.
The slight boost in the carryout number comes from expectations of a marginal increase in soybean yields, which are already projected at a record 53.2 bpa. The average analyst guess predicts output at a record 4.6 billion bushels.
WHEAT
Wheat futures have been exhibiting better prices after reaching new contract lows just a couple of weeks ago. That’s just in time for the winter wheat planting season, as much of the wheat country is experiencing drought conditions. But, as the saying goes, “Plant in the dust, and bins will bust.”
Notable drought alleviation may not come until the winter, per long-range weather forecasts. However, better chances of precipitation down the road could favor crop development when the crop emerges from dormancy next year.
But looking more near-term, the 2024/25 wheat carryout estimate on Thursday is expected to decline by 6 million bushels from the previous report to 822 million bushels.
Noncommercial traders have been slowly reducing their significantly large short positions since the end of May 2023. That comes as U.S. wheat export demand has shown improvements during the current marketing year, though shipments are still projected near their 52-year lows.