Mixed bag in new crop outlook

CHARLOTTE, Mich. — Slightly bullish corn numbers and somewhat bearish soybean data were featured in the U.S. Department of Agriculture’s supply and demand estimates report released May 10.

Angie Setzer and Karl Setzer, copartners at Consus Ag Consulting, hosted a live podcast on X, formerly Twitter, as the USDA’s domestic and global balance sheets estimate was rolled out that included a first look at the 2024-2025 marketing year.

How did the new crop data compare with what traders were anticipating heading into the report?

Angie: Wheat carryout came in a 766 million bushels, 20 million below what traders expected. New crop corn carryout came in at 2.102 billion bushels.

That was about 180 million bushels lower than what traders were expecting. New crop yield was left unchanged at 181 bushels per acre.

Beginning corn stocks were trimmed down to 2.022 billion bushels. That was below the 2.1 billion we had seen before. Feed and residuals use is up a bit to 5.75 billion bushels on corn.

Ethanol demand is unchanged year over year with, and exports are up about 50 million from the old crop numbers. That put new crop ending stocks and 2.102 billion bushels.

New crop soybean ending stocks came in at 445 million bushels, slightly above what traders were expecting.

Old crop soybean ending stocks came in right in line with what the trade expected at 340 million bushels. USDA has the new crop soybean yield at 52 bushels per acre.

From a demand side, USDA did bump new crop exports which is interesting just in what we’re seeing when it comes to current sales pace. Year over year saw soybean residual use down; seed is up just a little bit.

Crushing are expected to be up 125 million bushels year over year. So, that’s a bit aggressive for soybeans.

The corn numbers came in a bit lower than what traders were expecting. That should be supportive to price from a domestic standpoint.

I have a hard time saying that 2.1 billion carryout is bullish, but it was much lower than what traders were anticipating, and it does open the door to some pretty substantial changes.

Were there any numbers on the global balance sheet that stood out?

Karl: USDA left the Argentina soybean crop at 50 million metric tons. The Brazil soybean crop is at 154 million metric tons. So, we didn’t’ see the big drops there.

The 2024-2025 new crop numbers, though, had Argentina soybean production at 51 million metric tons and 169 million metric tons for next year’s Brazil soybean crop.

Chinese corn production for next year came out at 292 million metric tons. This morning, China officials put that out at 297 million. So, there’s already a 5 million ton discrepancy.

The world wheat carryout came in at 257.8 million metric tons. We expected 257.2 million.

The world soybean carryout for 2024-2025 is expected at 128.5 million metric tons. A big soybean carryout is expected.

That’s almost 8 million metric tons more than what the trade was expecting at the very top of the trade estimate. That’s really the only thing that I would call a surprise in what I saw in all of this data this month.

World corn carryout for 2024-2025 is projected at 312 million metric tons, 7 million metric tons less than what the trade expected. That’s a bit of a shock there.

The initial Brazil new crop corn production is estimated at 127 million metric tons. So, there was quite a bit of shaking up on the global side, which is not too surprising.

The Russian 2024-2025 wheat crop at 88 million metric tons is a pretty sizable drop. They’re at 90 million this year after the recent cold snap. We started in the mid-90s, so quite a drop to that Russian wheat crop projection.

What will the trade be focusing on going forward from this report?

Angie: Now the conversation turns to weather and what we’re going to see there. One of the things that happen this time of year is that there’s conversation about late planting or not planting.

One of the things that USDA, the University of Illinois and all kinds of folks have pointed out is that having 50% of the crop planted by the middle of May is really the key to meeting trend-line yields, at the very least is kind of the important foundation that we need to see.

We may struggle in some parts to see that and that creates some interesting dynamics in the eastern Corn Belt cash market as we look ahead and potentially let us see some interesting moves in the corn market.