USDA-WASDE REPORT #650, July 12^th 2024

OVERVIEW

The USDA provided updated projections for the production of corn and soybeans in the July 12^thWorld Agriculture Supply and Demand Estimates (WASDE) #650, reflecting the anticipated 2024 crop. Production values for corn and soybeans were changed minimally from the June edition since they were based on actual field data updating the March 28^thProspective Planting Report. Projections of crop size and ending stocks are based on acreage, yield, carry-forward levels from 2023, and with the latest assumptions of domestic use and exports.

The July 12^th WASDE report predicted that corn would be harvested from 83.4 million acres, up 1.6 percent from the June projection. The soybean crop will be harvested from 85.3 million acres, down 0.4 percent from the previous June report.

The July WASDE held the yield value for the 2024 corn crop at 181.0 bushels per acre. By comparison yield was 174.9 bushels per acre in 2023. The July soybean yield was held at 52.0 bushels per acre compared to 49.9 bushels per acre in 2023.

The June 2024 USDA projection for the ending stocks of corn was unchanged at 2,102 million bushels. The June 2024 USDA projection for the ending stock of soybeans was raised 2.2 percent to 455 million bushels.

The July 2024 WASDE reduced the projection of corn price by 10 cents to 430 cents per bushel. The projected average season price for soybeans was lowered 10 cents to 1,110 cents per bushel. The price of soybean meal was retained at $330 per ton. Projected commodity prices suggest stable to lower feed costs for livestock and poultry producers. Row crop farmers will experience lower margins given higher production costs. This situation has contributed to an impasse in the decisions of the respective House and Senate Agriculture Committees regarding allocation of funding for the combination of nutrition support and conservation over farm commodity price supports in the delayed Farm Bill.

Projections for world output included in the July 2024 WASDE report reflect the most recent estimates for the production and export of commodities especially in the Southern Hemisphere with an emphasis on Argentine and Brazil. Economists also evaluated the likely impacts from ongoing hostilities in Ukraine following extensive destruction of agricultural infrastructure by the Russian Federation. It is evident that production and hence exports of wheat, corn and sunflower from Ukraine will be reduced compared to pre-war averages.

It is accepted that USDA projections for export are also based on the perceived intentions and needs of China. This Nation has sharply curtailed purchases of commodities and especially U.S. soybeans during the current market year despite an anticipated transition to a La Nina event and recovery of the Nation’s economy influencing consumer demand for food and fuel.

Reports on volumes of commodities exported are included in weekly editions of EGG-NEWS, derived from USDA-FAS sales data. Weekly Crop Progress reports will be posted through late November

CORN

Based on current yield and acreage projections for the 2024 corn harvest, the July WASDE Report predicted a crop of 15,100 million bushels, up 1.6 percent from June and compared to 15,234 million bushels for the previous 2023 record harvest. The “Feed and Residual” category was raised 1.3 percent to 5,825 million bushels. The Food and Seed category was retained at 1,405 million bushels. The Ethanol and Byproducts Category was unchanged at 5,450 million bushels consistent with estimated demand for E-10 and higher blends for summer driving. Gasoline consumption is now less restrained despite high prices and changes in commuting patterns reflecting a recovery from COVID restrictions. Projected corn exports were raised 1.1 percent to 2,225 million bushels, based on recent orders, and ongoing shipments to China and taking into account the anticipated lower availability of coarse grains from Eastern Europe. For week ending July 4^th exports of U.S. corn are 27.1 percent higher for the current market year to date, compared to the corresponding week in the previous market year. The USDA considers world weather patterns in developing projections including the effect of a transition to a La Nina event by the fourth quarter of 2024. The anticipated ending stock of corn in the July WASDE report was down 0.2 percent from the June WASDE to 2,097 million bushels.

The forecast USDA average season farm price for corn in the July WASDE report covering the 2024 crop was reduced 10 cents to 430 cents per bushel. At 16H00 on July 12^th after the noon release of the WASDE the CME spot price for corn was 416 cents per bushel, down 8.2 percent from the quotation on June 12^th and down 3.3 percent from the July USDA projection.

JULY 2024 WASDE #650 Projections For The 2024 Corn Harvest:

1 metric ton = 39.368 bushels

Average Farm Price: 430 cents per bushel. (Down 10 cents per bushel from the June WASDE Report reflecting the 2024 projected crop)

SOYBEANS

Based on a prediction of increased acreage to be planted and adjusted yield, the USDA July WASDE projected the 2024 soybean crop at 4,435 million bushels with an estimated yield of 52.0 bushels per acre from 83.4 million acres harvested. Crush volume was unchanged from the June WASDE report at 2,425 million bushels. Projected exports were held at 1,825 million bushels despite reduced exports to China. For week ending July 4^th shipments for the current market year are down 16.5 percent from the corresponding week of the previous market year. Ending stocks were anticipated to be 455 million bushels, unchanged from the June WASDE report. This was based on a corresponding 5 million bushel increase in beginning stock and a 15 million bushel lower production compared to the June WASDE.

There is uncertainty over orders from China for the current market year. This is attributed to competition from Brazil and an assumption of lower requirements for animal feed due to restrictions on pork production by the Central Government. In reality traders in China are obligated to order on a stable or declining market unless faced with shortages. Prior to 2018, China, the largest trading partner for U.S. agricultural commodities, imported the equivalent of 25 percent of U.S. soybeans harvested.

The USDA July 2024 projection for the ex-farm price for soybeans for the 2024 harvest was 10 cents lower from June to 1,110 cents per bushel. At 16H00 on July 12^th following release of the WASDE, the CME spot price was 1,064 cents per bushel, down 9.6 percent compared to the June 12^th quotation and 4.1 percent above the July USDA projection.

JULY 2024 WASDE #650 PROJECTION FOR THE 2024 SOYBEAN HARVEST:-

1 metric ton = 36.74 bushels

Average Farm Price: 1,110 cents per bushel (Down 10 cents from the June 2024 WASDE Report)

SOYBEAN MEAL

The projected production of soybean meal from the 2024 soybean crop will be 57.08 million tons, unchanged from the June WASDE and consistent with the 2,425 million bushel projected soybean crush volume. This figure also corresponds with increased demand for biodiesel and with a proportional increase in U.S. crushing capacity. Production is driven both by exports and domestic consumption for livestock feed and for soy oil supplying the food and biodiesel segments. The projection of domestic use was unchanged 40.12 million tons. Exports were held at 17.5 million tons.

The USDA retained the ex plant price of soybean meal at $330 per ton as an average for the season based on supply and demand considerations as reflected in a stable ending stock of 450,000 tons representing 0.8 percent of supply.

At 16H00 on July 12^th the CME spot price for soybean meal was $314 per ton, down 12.7 percent compared to the June 12^th CME quotation and 17.4 percent lower than the WASDE projection of $380 per ton.

JULY 2024 WASDE #650 PROJECTION OF SOYBEAN MEAL PRODUCTION AND USE

(Quantities in thousand short tons)

Average Price ex plant:$330 per ton (Unchanged since the May WASDE Report)

IMPLICATIONS FOR PRODUCTION COST

The price projections based on CME quotations for corn and soybeans suggest lower feed production costs for broilers and eggs. Going forward, prices of commodities will be determined by World supply and demand and U.S. domestic yield, use and exports.

For each 10 cents per bushel change in corn:-

• The cost of egg production would change by 0.45 cent per dozen
• The cost of broiler production would change by 0.25 cent per live pound

For each $10 per ton change in the cost of soybean meal:-

• The cost of egg production would change by 0.35 cent per doze
• The cost of broiler production would change by 0.30 cent per live pound.

WORLD SITUATION

With respect to world coarse grains and oilseeds the June 2024 WASDE Report included the following appraisals by USDA:-

COARSE GRAINS:

“Global coarse grain production for 2024/25 is forecast 1.2 million tons higher to 1.512 billion. This month’s 2024/25 foreign coarse grain outlook is for lower production and use, and larger stocks relative to last month. Foreign corn production is reduced based on declines for the EU, Canada, and Russia. Canada is down based on lower area. For the EU and Russia, extreme early-season heat in southeastern Europe and the Southern and North Caucasus districts of Russia reduce yield prospects. For 2023/24, corn production is lowered for Argentina, Pakistan, Mexico, and the Philippines. Foreign barley production for 2024/25 is down with cuts for Canada, the EU, and Russia”.

“Major global trade changes for 2024/25 include larger corn exports for the United States with reductions for Russia and the EU. Corn imports are raised for Canada and Mexico but lowered for Iran and Bangladesh. For 2023/24 corn exports are raised for Ukraine and the United States but lowered for Argentina, Pakistan, and India. Foreign corn ending stocks for 2024/25 are higher, with increases for Pakistan, Mexico, and Turkiye, partly offset by a decline for Ukraine. Global corn stocks, at 311.6 million tons, are up 0.9 million”.

OIL SEEDS:

“Foreign oilseed production for 2024/25 is reduced slightly on lower sunflower seed output mostly offset by higher rapeseed. Sunflower seed production is reduced on lower yield prospects for Russia and Ukraine due to hot and dry weather conditions early in the season. Foreign rapeseed production is increased for Canada and the EU. Foreign soybean production is unchanged with higher production for Canada offset by lower production for Russia”.

“Global soybean beginning stocks for 2024/25 are increased slightly, with higher stocks for China mainly offset by lower stocks for Argentina, Brazil, and Paraguay due to revisions for 2023/24. Argentina’s soybean production for 2023/24 is revised down 0.5 million tons to 49.5 million guided by data from the Argentine Ministry of Agriculture, Livestock and Fisheries. China’s soybean imports for 2023/24 are revised up 3.0 million tons to 108.0 million on larger-than-anticipated arrivals expected in the fourth quarter of the marketing year. Exports for Argentina, Brazil, Paraguay, Benin, and Canada are also raised for 2023/24”.

“With slightly higher beginning stocks, lower global production, and relatively small changes to use in 2024/25, global soybean stocks are reduced 0.1 million tons to 127.8 million on lower stocks for Argentina, Brazil, Paraguay, Russia, the EU, and the United States, mostly offset by higher stocks for China”.

*Values rounded to one million metric ton

(1 metric ton corn= 39.37 bushels) (“ton” represents 2,000 pounds)