EGG‑NEWS.com

OVERVIEW

The USDA provided updated projections for the production of corn and soybeans in the December 10^thWorld Agriculture Supply and Demand Estimates (WASDE) #655, reflecting the 2024 crop. Production values for corn and soybeans were predictably little changed from from the November edition and are based on actual harvest data. Projections of crop size and ending stocks are derived from acreage planted, updated yields from the harvest now completed, carry-forward levels from 2023, and with the latest assumptions relating to domestic use and exports.

The December 10^th WASDE report confirmed that corn was harvested from 82.7 million acres, unchanged from the November projection. The soybean crop was harvested from 86.3 million acres, unchanged from the November report.

The December WASDE held the yield value for the 2024 corn crop at 183.1 bushels per acre. By comparison yield was 174.9 bushels per acre in 2023. The December value for soybean yield was unchanged from the previous WASDE at 51.7 bushels per acre compared to 49.9 bushels per acre in 2023.

The December USDA projection for the ending stocks of corn was down 13.1 percent to 1,738 million bushels. The December USDA projection for the ending stock of soybeans was unchanged at 470 million bushels.

The December 2024 WASDE held the projection of corn price at 410 cents per bushel. The projected average season price for soybeans was reduced 60 cents to 1,020 cents per bushel. The price of soybean meal was lowered $30 to $300 per ton. Projected commodity prices suggest lower feed costs for livestock and poultry producers. Row crop farmers will experience declining margins or in some areas corn will be below break-even given relative production costs and per bushel prices. 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 delaying the 2023 Farm Bill. It is probable that even higher support prices will be required if importing nations respond negatively to tariffs proposed by the incoming Administration.

Projections for world output included in the December 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 a transition to a La Nina event especially on South America. Hostilities are ongoing in Ukraine following extensive destruction of agricultural infrastructure by the Russian Federation. 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 fiscal stimulus with a projected 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 harvest data for the 2024 corn crop, the December WASDE Report confirmed a record crop of 15,413 million bushels, and compared to 15,234 million bushels for the previous 2023 record harvest. The “Feed and Residual” category was held at 5,825 million bushels. The Food and Seed category was unchanged at 1,390 million bushels. The Ethanol and Byproducts Category was raised 0.9 percent to 5,500 million bushels consistent with estimated demand for E-10 and higher blends for driving needs. Projected corn exports were raised 6.5 percent to 2,475 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 and as the drought in producing nations in South America. For market year 2023-2024 exports of U.S. corn were 36.9 percent higher, compared to the previous market year. For the first eleven weeks of the 2024-2025 market year corn exports were 30.8 percent higher than for the corresponding week in the previous market year. The USDA considers world weather patterns in developing projections including the effect of the transition to a La Nina event during the present quarter. The anticipated ending stock of corn in the December WASDE report was down 10.3 percent from the November WASDE to 1,738 million bushels.

The forecast USDA average season farm price for corn in the December WASDE report covering the 2024 crop was unchanged at 410 cents per bushel. At 14H00 EST on December 10^th after the noon release of the WASDE the CME spot price for corn was 448 cents per bushel, up 3.6 percent from the quotation on November 8^th and up 9.3 percent from the December USDA projection.

December 2024 WASDE #655 Projections For The 2024 Corn Harvest:

1 metric ton = 39.368 bushels

Average Farm Price: 410 cents per bushel. (Unchanged since the September WASDE Report reflecting the 2024 crop)

SOYBEANS

Based on harvest data, the USDA December WASDE confirmed the 2024 soybean crop to be 4,461 million bushels, unchanged from November with a yield of 51.7 bushels per acre from 86.3 million acres harvested. Crush volume was held from the November WASDE report at 2,410 million bushels despite increased industry capacity. Projected exports were maintained at 1,825 million bushels despite the prospect of reduced imports by China. For market year 2023-2024 exports were down 14.9 percent from the previous market year. For the first eleven weeks of the 2024-2025 market year exports were up 19.2 percent over the corresponding week in the previous market year. Ending stocks were anticipated to be 470 million bushels, unchanged from the November WASDE report.

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 of China. The response of China with respect to anticipated import and punitive tariffs that are predicted will have a negative impact with respect to volume exported and hence lower domestic U.S. prices. 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 WASDE December 2024 projection for the ex-farm price for soybeans for the 2024 harvest was down 60 cents to 1,020 cents per bushel. At 14H00 EST on December 10^th following release of the WASDE, the CME spot price was 996 cents per bushel, down 3.3 percent compared to the November 8^th quotation and 2.3 percent below the December USDA projection.

December 2024 WASDE #655 Projection for the 2024 Soybean Harvest:-

1 metric ton = 36.74 bushels

Average Farm Price: 1,020 cents per bushel (Down 60 cents per bushel from the November 2024 WASDE Report)

SOYBEAN MEAL

The projected production of soybean meal from the 2024 soybean crop will be 56.75 million tons, unchanged from the November WASDE and consistent with the 2,410 million bushel projected soybean crush volume. This figure also corresponds to stagnant demand for biodiesel despite expanded 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 at 40,025 million tons. Exports were projected at 17.40 million tons.

The USDA reduced the ex plant price of soybean meal by $30 in the December WASDE to $300 per ton as an average for the season based on supply and demand considerations. USDA predicted an unchanged ending stock of 450,000 tons representing 0.8 percent of supply.

At market close on December 10^th the CME spot price for soybean meal was $293 per ton, down 1.3 percent compared to the November 8^th CME quotation and 2.3 percent lower than the December WASDE projection of $300 per ton.

December 2024 WASDE #655 Projection of Soybean Meal Production and Use

(Quantities in thousand short tons)

Average Price ex plant:$300 per ton (Down $30 per ton from the November 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 November 2024 WASDE Report included the following appraisals by USDA:-

COARSE GRAINS:

“Global coarse grain production for 2024/25 is forecast 0.6 million tons lower to 1.499 billion. The 2024/25 foreign coarse grain outlook is for lower production, trade, and ending stocks relative to last month. Foreign corn production is cut with declines for the EU, Mexico, and Indonesia partially offset by an increase for Ukraine. EU corn production is down reflecting reductions for Italy, Romania, Croatia, and Austria that are partially offset by increases for Poland, Spain, and France. Mexico corn production is reduced reflecting lower winter corn area expectations. Foreign barley production is slightly higher with increases for Canada and Ukraine partially offset by reductions for Australia and the EU. Corn exports for 2024/25 are raised for the United States and Canada but lowered for the EU. Corn imports are higher for Bangladesh, the EU, Iran, and Mexico but cut for China. Foreign corn ending stocks are reduced based on declines for China, the EU, and Indonesia. Global corn stocks, at 296.4 million tons, are down 7.7 million”.

 OILSEEDS:

“Global oilseed production for 2024/25 is raised this month mainly on higher soybean production partly offset by lower rapeseed. Soybean production is raised 1.7 million tons to 427.1 million on higher area for Argentina and Bolivia and higher yields for Canada. Canola production is reduced 1.1 million tons mainly on a lower yield for Canada based on the latest Statistics Canada report. Global sunflower seed production is nearly unchanged, with higher production for Ukraine and Russia mostly offset by a lower crop for the European Union.

The global 2024/25 soybean outlook includes higher production, exports, crush, and ending stocks. Exports are raised for Canada and Bolivia on higher supplies, and imports are raised for Algeria and Zimbabwe. Crush is raised 1.0 million tons to 41.0 million for Argentina, leading to higher exports of soybean meal and oil. Soybean meal imports are raised for the EU, Algeria, Iran, and Venezuela. Global soybean oil exports are raised 0.6 million tons to 12.6 million on higher exports for Argentina, Brazil, and the United States. Higher shipments of soybean oil are offset by lower exports of palm oil, down 1.4 million tons to 46.6 million, due to reduced supplies and lower production for Indonesia in 2023/24 and Malaysia in 2024/25. Global vegetable oil ending stocks are reduced to 27.9 million tons, down 2 percent from last month and 7 percent from 2023/24.

World and U.S. Data Combined for Coarse Grains and Oilseeds:-

*Values rounded to one million metric ton

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