News in brief:
– Argentina’s Rosario grains exchange and the USDA January reports revealed significant reductions in corn and soybean production estimates due to drought and lower yields, respectively.
– These updates highlight tightening global supplies, with bullish implications for crop prices and heightened market volatility.
Argentina’s Rosario grains exchange cut its 2024/25 corn production forecast to 48 million metric tons due to drought conditions. Soybean output is also expected to decline, with productivity scenarios revised downward.
This report underscores tightening supplies and shifting market dynamics, setting the stage for heightened price volatility in the months ahead.
The United States Department of Agriculture (USDA), in its January reports also highlighted significant revisions in crop production, stocks, and market outlooks.
In the Crop Production 2024 Summary, the agency lowered both corn and soybean yield and production estimates more than expected. It projected corn yield at 179.3 bushels per acre (down from 183.1 in December), with production pegged at 14.867 billion bushels. Soybean yield dropped to 50.7 bushels per acre (from 51.7), with production reduced to 4.366 billion bushels.
USDA’s January World Agricultural Supply and Demand Estimates (WASDE) report reduced 2024/25 US corn and soybean ending stocks. Corn stocks are estimated at 1.540 billion bushels (down from 1.738 billion), while soybean stocks fell to 380 million bushels (from 470 million). Wheat stocks, however, increased to 798 million bushels.
Globally, corn and soybean ending stocks were also trimmed. Corn is forecasted at 293.3 million metric tons (down from 296.4), while soybeans stand at 128.4 million metric tons (previously 131.9). Wheat stocks increased slightly to 258.8 million metric tons.
The quarterly Grain Stocks report showed lower-than-expected totals for corn, soybeans, and wheat as of December 1, 2024. Corn stocks were 12.074 billion bushels, down year-over-year. Soybean stocks increased to 3.1 billion bushels, while wheat stocks rose to 1.57 billion bushels.
The USDA estimated 2025 winter wheat planted acres at 34.12 million, a 2% increase from 2024 and higher than trade expectations.
Market experts noted the reports’ bullish implications for corn and soybean prices. One report highlighted reduced carryout levels and strong price momentum. Another analysis emphasised the impact of challenging growing conditions and surging basis levels.
