Mixed Outcomes for Corn and Soybeans Amidst Global Market Shifts
The latest WASDE report released on Friday night has led to significant fluctuations in agricultural commodity prices, with US wheat experiencing a sharp decline. Key changes in the report included unexpected adjustments in US corn and soybean stocks, influencing market reactions across multiple regions.
The WASDE report revealed a bearish outlook for wheat, with US wheat ending stocks for 2024/25 increasing by 98 million bushels to 856 million bushels, contrary to market expectations of 785 million bushels. This increase in wheat stocks contributed to a decline in wheat prices across major exchanges:
- Chicago December 2024 wheat fell by 19.25 cents per bushel to 575.75c/bu.
- Kansas December 2024 wheat decreased by 15.25 cents per bushel to 586.5c/bu.
- Minneapolis December 2024 wheat dropped by 20.25 cents per bushel to 617.25c/bu.
- MATIF December 2024 wheat fell by €3/t to €228.75/t.
In contrast, US corn showed a more favorable outcome, with 2024/25 ending stocks decreasing by 5 billion bushels to 2.097 billion bushels, significantly below the trade estimate of 2.289 billion bushels. This unexpected reduction in corn stocks led to a slight increase in corn prices, with December 2024 corn rising by 4 cents per bushel to 414.75c/bu.
Soybeans, however, saw a modest reduction in ending stocks for 2024/25 by 20 million bushels to 435 million bushels, aligning closely with trade estimates. The soybean market responded with a minor price drop, with November 2024 soybeans decreasing by 2.5 cents per bushel to 1065.25c/bu.
Internationally, Russian wheat values remained stable around US$220/t FOB, with the winter crop harvest over 20% complete. The USDA maintained Russian wheat production estimates at 83 million tonnes and exports at 48 million tonnes, down from the previous year’s figures.
French wheat ratings dropped another 1% to 57% good/excellent, marking the lowest ratings since 2020 and significantly behind last year’s 80% at this time. The French harvest is progressing slowly, with only 4% complete compared to 26% at the same time last year.
In Australia, wheat and barley prices in the west closed lower on Friday, while canola prices remained relatively stable at A$790/t FIS for the new crop. Recent patchy rains across cropping areas provided some relief, with forecasts indicating dry conditions ahead for Queensland and northern New South Wales. Southern parts of New South Wales, South Australia, Victoria, and Western Australia are expected to receive variable rainfall.
The Australian dollar held steady at US$0.6775, with rising expectations for a US interest rate cut in September.
In China, soybean imports for the first half of 2024 totaled 48.48 million tonnes, down 2.2% year-on-year, with June imports reaching 11.11 million tonnes. The upcoming release of economic statistics in Beijing, including GDP and industrial production figures, has analysts setting low expectations.
Overall, the WASDE report’s mixed outcomes have led to varied market reactions, highlighting the complexities and interconnectedness of global agricultural markets.
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