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WASDE Report
Friday (Oct. 11), the USDA released the October Crop Production and WASDE reports. Increased supplies on generally good weather in the U.S. have pulled grain and cotton prices back to the lowest levels since 2020. This month USDA made no adjustments to its outlook for U.S. average producer prices. For the 2024/25 marketing year, average soybean prices are expected to decline $1.60 per bushel or 13 percent from last year to $10.80 per bushel. Prices for other major crops are expected to decline as well with the average producer price for long-grain rice falling $1.40/cwt. (-9%) to $14.50/cwt., cotton 10 cents/lb (-13%) to 66 cents, and corn down 45 cents/bu. from last year to $4.10 per bushel.
October adjustments to USDA’s major crop balance sheets are detailed below.
Soybeans
This month, USDA reduced soybean production by 4 million bushels to 4.582 billion. The average yield was trimmed by .1 bushel per acre, which remains a record at 53.1 bushels. Harvested acres were left unchanged at 86.3 million. Notable state yield reductions this month were Indiana and Ohio, which were both down 3 bushels per acre. Yields were reduced by 1 bushel per acre in Minnesota and Wisconsin. Illinois’ yield was increased 2 bushels and Iowa increased 1 bushel per acre.
Very minor changes to new crop demand resulted in 2024/25 ending stocks holding steady at 550 million bushels, which is a considerable increase over last year’s 342 million. Global stocks were virtually unchanged at 134.65 million metric tons (mmt). The U.S. season-average soybean price for 2024/25 is unchanged at $10.80 per bushel, down from $12.40 last year.
Rice
This month the USDA made no changes to the U.S. long-grain or medium grain new crop balance sheets. However, there were relatively small adjustments to individual state average yields with Missouri and Texas increasing 100 pounds and 400 pounds respectively. California’s yield was reduced by 150 to 8,650 pounds.
On the supply-side of the U.S. long-grain balance sheet, Production remains at 166.8 million cwt, a four-year high driven by increasing acres. With record Imports of 39 million cwt and Beginning Stocks of 19.3 million, total long-grain supply is record large at 225.1 million cwt for the 24/25 marketing year.
For demand, the estimate of 2024-25 long-grain exports is currently 76 million cwt and the highest since 2016. Domestic and residual use of 122 million cwt is record large. Total long-grain demand of 198 million is also record large.
New Crop Ending Stocks are projected at 27.1 million cwt, up from 19.3 million last year. The USDA projects the 2024-25 marketing year average farm price to be $14.50/cwt or $6.53/bushel for both long-grain and southern medium grain, unchanged from last month’s projection. The average price for the 2023-24 marketing year was $15.90/cwt for long-grain and $17.50 for southern medium grain.
In the World rice estimates, the most notable changes were made to India’s balance sheet with Beginning Stocks, Production and Exports all increased by 3 million metric tons (mmt) and Ending Stocks increasing by 4 mmt to 43 million. Of note, India’s rice production is expected to be a record 142 mmt. The USDA indicated an above-average monsoon season and more rice planted at the expense of cotton were factors behind India’s record production. India’s exports were increased on the removal of several export restrictions, including its export ban on non-basmati white rice at the end of September. Exports for Pakistan, Thailand, and Vietnam are all reduced with the removal of India’s export ban.
Cotton
The USDA report was bearish compared to pre-report expectations. Combined reductions in US exports and mill use exceeded a sizeable production cut this month following Hurricane Helene. This resulted in a net increase of 100,000 bales in ending stocks.
The USDA report put US 2024/25 cotton production at 14.20 million bales, down from 14.51 million last month and slightly below the average expectation of 14.27 million. Average yield was lowered to 789 pounds/acre from 807 last month in the wake of damage from Hurricane Helene. US exports were lowered to 11.50 million bales from 11.80 million last month and below average expectations of 11.65 million. US ending stocks were increased to 4.10 million bales from 4.00 million last month versus 3.98 million expected. The 2024/25 season average upland farm price is unchanged at 66 cents per pound.
Of particular interest on the World cotton balance sheet, China’s production was revised 400,000 bales higher to 28.2 million bales while their imports were lowered to 9 million from 9.5 million last month and 15 million last year. China has been one of the largest buyers of US cotton in recent years, but their strong crop this year coupled with their sluggish economy has lowered US export prospects.
Corn
USDA increased U.S. corn production 17 million bushels this month to 15.203 billion. The record yield that has been expected for some time was extended by .2 bushels to 183.8 bushels per acre. Harvested acres were left unchanged at 82.7 million.
Parts of the eastern Corn belt saw downward revisions in yields this month, reflecting drought conditions in the region. Indiana’s yield was reduced 8 bushels and Ohio’s 4 bushels per acre. However, these reductions were offset by increases in Iowa, Kansas and Missouri which saw a yield bump of 2, 7, and 4 bushels per acre respectively. The only change to new crop demand was a 25 million bushel increase to exports to 2.325 billion leaving 2024/25 ending stocks at 1.999 billion; up from last year’s 1.76 billion bushels. With a relatively heavy outlook for ending stocks in 24/25, the season-average producer was unchanged this month at $4.10 per bushel compared to $4.55 last year.
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