USDA’s WASDE report throws a few curveballs

MarketsFarm — There were some surprises in the November world agricultural supply and demand estimates (WASDE) from the U.S. Department of Agriculture, released Thursday.

USDA defied trade expectations when it came to 2023-24 ending stocks of U.S. corn, soybeans, and all wheat, with those being higher. As well, the department came in above what the markets foresaw for this year’s corn and soybean yields. However, the new USDA numbers did not exceed the range of market expectations.

With the average trade guess on 2023-24 U.S. corn yields at 173.2 bushels per acre, the USDA’s November number came in at 174.9 bu./ac., versus October’s 173. That altered production from 15.06 billion bushels last month to now 15.23 billion, well above the average trade guess of 15.09 billion. That raised ending stocks from 2.11 billion bushels in October to 2.16 billion this month. The trade range was from two billion to 2.5 billion bushels.

For 2023-24 U.S. soybeans, USDA bumped up the yields from 49.6 bu./ac. in October to 49.9, when the average trade guess expected 49.5, based on a range of 49 to 50.4. Production increased from October’s 4.1 billion bushels to 4.13 billion, due to better than anticipated harvests in Wisconsin, Tennessee, North Dakota, South Dakota and Ohio. The average market projection was 4.11 billion bushels, from a range of 4.04 billion to 4.17 billion.

While the trade believed the U.S. soybean carryover would be 221 million bushels, one million more than in October’s report, USDA boosted its figure to 245 million. The range had been 190 million to 261 million.

All U.S. wheat was largely expected to standpat, but USDA increased ending stocks by 14 million bushels to now 684 million. Trade guesses ranged from 650 million to 696 million bushels. The department noted that while exports held at 700 million bushels, domestic use slipped four million at 1.86 million.

Globally, one of the most notable changes in the November USDA report came in the 2023-24 corn carryover, which climbed from 312.4 million tonnes in October to now 314.99 million. Based on a range of 309 million to 314 million tonnes, the average trade guess was 312 million.

Wheat also came in a little bit above the trade guesses, with USDA nudging up its 2023-24 carryout from 258.1 million tonnes last month to November’s 258.69 million. The average trade guess was 257.9 million tonnes, from a range of 256 million to 259.4 million.

Among the changes USDA made for wheat by country were production decreases for India at 110.55 million tonnes (113.5 million in October); Argentina, 15 million tonnes (16.5 million); and Kazakhstan, 12 million (13 million). Russia had the most notable increase from 85 million tonnes in October to now 90 million, while Australia remained at 24.5 million despite its dry conditions.

Ending stocks for world soybeans did not remain unchanged at 115.6 million tonnes. Rather, USDA lowered 2023-24 stocks to 114.5 million tonnes; the trade placed them at 114.0 to 117.8 million.

Another surprise from USDA was no changes for 2023-24 corn and soybean production in Argentina and Brazil. That’s despite drought in Argentina, along with Brazil facing very dry conditions in its north and excessively wet conditions in its south. To USDA, Argentina was still on track to combine 55 million tonnes of corn and Brazil is to bring in 129 million. The soybean harvest in Argentina remained at 48 million tonnes, while Brazil is to reap 163 million.

— Glen Hallick reports for MarketsFarm from Winnipeg.