CORN:
US 2024/25 corn yield came in at 181.0 bushels/acre versus an average expectation of 180.7 and a range of expectations from 179 to 181.5. This brought corn production to 14.860 billion bushels, which was close to the 14.870 billion expected (range 14.720-15.018 billion) and down from 15.342 billion last year. Ending stocks came in at 2.102 billion bushels versus 2.282 billion expected (range 2.032-2.564 billion). USDA lowered its forecast for 2023/24 ending stocks to 2.022 billion bushels from 2.122 billion in the April report. This was above the average expectation of 2.094 billion (range 1.970-2.172 million). World corn ending stocks for 2024/25 came in at 312.27 million tonnes versus 319 million expected (range 310-334 million). World ending stocks for 2023/24 came in at 313.08 million tonnes versus 314.9 million expected (range 310-320 million). This was down from 318.28 million in the April report. Brazilian 2023/24 production came in at 122 million tonnes versus 122.3 million expected (range 120-125.6 million) and down from 124 million in April. Argentine 2023/24 production came in at 53 million tonnes versus 52 million expected (range 50-55 million) and down from 55 million in April.

PRICE OUTLOOK:
USDA made some minor changes on the old crop balance sheet, raising ethanol output by 50 million bushels and raising exports 50 million as well. This brought ending stocks below guesses. On the new crop 2024/25 balance sheet, USDA used a 181 yield, left ethanol usage unchanged from this season and took exports another 70 million bushels higher from 2023/24. This brought new crop carryout down below the average guess. 2023/24 Argentine and Brazil corn production were both lowered by 2 million tonnes. However, the large discrepancy between USDA's Brazil production at 122 million tonnes and CONAB's at 110.964 remains unresolved. CONAB will update their numbers on Tuesday. Next week looks wet for the southern half of the Corn Belt, which may offer some additional support. New crop carryout for corn is by far the least burdensome of the grains, and that provides underlying support on breaks. The next objective for July Corn after this week's breakout is 484.

The World Agricultural Supply and Demand Estimates (WASDE) report is prepared monthly and includes forecasts for U.S. and world wheat, rice, and coarse grains (corn, barley, sorghum, and oats), oilseeds (soybeans, rapeseed, palm), and cotton. U.S. coverage is extended to sugar, meat, poultry, eggs, and milk. USDA World Agricultural Outlook Board analysts chair the Interagency Commodity Estimates Committees (ICECs) comprising representatives from several key USDA agencies. The nine ICECs- one for each commodity- compile and interpret information from USDA and other domestic and foreign official sources to produce the report.

The ICECs rely on Foreign Agricultural Service (FAS) attaché reports and analysis of foreign commodity developments, Economic Research Service (ERS) domestic and foreign regional assessments, and National Agricultural Statistics Service (NASS) U.S. crop and livestock estimates. For domestic policy and market information, the Board relies on the Farm Services Agency and the Agricultural Marketing Service. WAOB and FAS use weather analysis and satellite imagery to monitor crop conditions. Additional private and public information sources are considered.

This broad information base is reviewed and analyzed by ICEC members who bring diverse expertise and perspectives to the report. To arrive at consensus forecasts, alternative assessments of domestic and foreign supply and use are vetted at the ICEC meetings. Throughout the growing season and afterwards, estimates are compared with new information on production and utilization, and historical revisions are made as necessary.

The WASDE reports a full balance sheet for each commodity. Separate estimates are made for components of supply (beginning stocks, imports, and production) and demand (domestic use, exports, and ending stocks). Domestic use is subdivided into major categories, for example corn for feed and corn for ethanol. Domestic use may be based on data from other Federal agencies: for example, U.S. wheat ground for flour, soybeans crushed for oil, and cotton mill use come from the Bureau of the Census. The demand side of the balance sheet may include a category for “residual” or “unaccounted” disappearance to balance known uses against total supplies.

The WASDE also reports forecast season-average farm prices for most items. Prices tie together both sides of the balance sheet. Market prices aid in rationing available supplies among competing uses. Prices also indicate potential supply responses, for example potential planting decisions for the upcoming year. The process of forecasting price and balance sheet items is complex and involves the interaction of expert judgment, commodity models, and in-depth research by USDA analysts on key domestic and international issues.

These reports present US and world supply/demand outlooks for a wide variety of agricultural products, including grains, oilseeds, cotton, pork and beef. They represent an accumulation of data on production and usage and offer projections for current/upcoming the marketing year.

The reports are released monthly, but the estimates are not necessarily revised every month. For the US data, production numbers tend to be revised during the growing season and into harvest, while demand numbers tend to be adjusted once the harvest is in and the products are marketed. The world data is adjusted every month because the data comes from many countries around the world.

Analysts focus primarily on each year’s ending stocks, as that provides a picture of whether supplies will be “tight” or “ample” at the end of the year. However, as production and consumption have been on a long term growth path for several decades, stock levels that may have been considered “ample” in years past may not be so anymore. With that in mind, analysts often prefer to use the stocks/usage ratio as a way of taking into account long term growth trends.

The world data covers individual countries as well as the entire world. Special attention is paid to the key producers, exporters and consumers. Brazil and the US together represent about 70% of global production and 85% of exports. The US, Argentina and Brazil represent 70% of global corn exports. Wheat is grown all around the world, with the US, Argentina, Australia, Canada, EU, Russia and Ukraine all major producers. India is the world’s largest producer of cotton, but the US is by far the largest exporter.

Traders will also want to keep in mind that marketing years vary from crop to crop, coinciding with the harvest. For example, wheat’s marketing year runs from June through May, cotton’s from August through July, corn and soybeans from September through August, and soybean meal and soybean oil from October through September (one month after soybeans).

The WASDE report also covers US meat production and consumption, including beef, pork and poultry. Annual production, consumption, export and stocks data is presented in the report, similar to the field crops. But this report also presents quarterly production data, which is of interest to cattle and hog traders, who track quarterly changes and compare them to previous years to gain insight as to whether the supply setup in upcoming quarters.