USDA Reduces Corn and Soybean Production Estimates More Than Expected

More From USDA

Corn

“This month’s 2024/2025 U.S. corn outlook is for lower production and ending stocks,” USDA said in the November WASDE report. “Corn production is forecast at 15.1 billion bushels, down 60 million from last month on a 0.7-bushel reduction in yield to 183.1 bushels per acre. Harvested area for grain is unchanged at 82.7 million acres. Total use is unchanged at 15 billion bushels. With supply falling and no change to use, corn ending stocks are down to 1.9 billion bushels.” 

Soybeans

“U.S. soybean supply and use changes for 2024/2025 include lower production, exports, crush, and ending stocks,” USDA said in the report. “Soybean production is forecast at 4.5 billion bushels, down 121 million on reduced yields. The largest production changes are for Iowa, Illinois, and Minnesota. Exports are lowered 25 million bushels to 1.8 billion on lower supplies and sales to date. Crush is lowered 15 million bushels to 2.4 billion, reflecting lower soybean meal domestic disappearance and exports. Soybean ending stocks are lowered 80 million bushels to 470 million bushels.” 

Wheat

“The outlook for 2024/2025 U.S. wheat this month is for slightly larger supplies, domestic use, and ending stocks but unchanged exports,” USDA said. “Supplies are raised on higher imports, increased 5 million bushels to 120 million, all on hard red spring. Domestic use is raised, all on food use, based mainly on the National Agricultural Statistics Service Flour Milling Products report. Exports are unchanged at 825 million bushels but there are offsetting by-class changes. Projected 2024/2025 ending stocks are increased 3 million bushels to 815 million, up 17% from last year.”

Trade Reaction

Naomi Blohm, senior market advisors, Total Farm Marketing: “Corn and soybean futures rallied modestly after the USDA report on the surprise of yield numbers coming in smaller than expected for both corn and soybeans…. Corn yield was lowered nearly one bushel, however the USDA made no changes to demand. Trade had thought that with the fast export pace this fall, that export demand would have likely been raised. No such luck. Ending stocks are now down a bit, coming in at 1.938 billion bushels, down from 1.999 last month. This is a comfortable number when looking at supply history. While the news is supportive, the corn and soybean markets have rallied for much of this week, and soybean prices touched the important 100-day moving average line on daily charts today which will likely hold as significant resistance. Corn prices rallied and matched the high price from early October on daily charts; this will also be a significant resistance area for now.”

Jeremy McCann, account manager, Farmer’s Keeper: “Personally, I’m not surprised to see the rather large reduction to soybean yield in today’s report. It’s no surprise that the hot and dry end to the growing season had an adverse effect on the crop, especially due to the late planting we had this spring. Corn yield also came in lower than trade expectations, which once again is no surprise but it is a larger movement than we typically see on the November report.” 

Al Kluis, managing director, Kluis Commodity Advisors: “The report was bullish because USDA took the corn and soybean yield numbers down. Initially corn and soybean futures surged higher. That ran into a lot of farmer selling, and now futures are calming down. I thought that it would take until the January report to see these smaller yield numbers. I think this will be the biggest change we see because I think that today’s numbers were not really estimates, but from objective yield data. So I think yields could get a little smaller in future reports, but I do not look for any major changes in either the corn or soybean yield numbers as we look ahead towards December and January.” 

Note: Trade expectations are sourced from Bloomberg.