CORN:
U.S. 2024/25 corn yield came in at 183.6 bushels/acre versus the average estimate of 182.7 and 183.1 in August. The range of expectations was 180.5 to 184. This is a bit of a surprise as most were looking for a yield cut after the dry finish to the growing season. The average change from August yield to September over the last three years has been 2 BPA, and September yield has been above guesses every year since 2015 and 21 out of the last 26 years, and this report adds another year to that list. Harvested acres were unchanged from August at 82.7 million. The average estimate was 82.7 million acres, and the range was 82.2 to 82.7. Harvested acres were lowered in the August report. Corn production came in at 15.186 billion bushels, versus 15.105 billion expected (range 14.932-15.215 billion) and 15.147 billion in the August report. U.S. ending stocks for 2024/25 came in at 2.057 billion bushels, versus the expected 2.033 billion (range 1.819-2.161 billion) and 2.073 billion in August. Beginning stocks were lowered by 55 million bushels, and the higher yield increased production by 39 million. No other changes were made to the balance sheet, resulting in the 16 million bushel decrease in ending stocks from last month. 2023/24 ending stocks came in below the range of expectations at 1.812 billion bushels. The average estimate was 1.859 billion, and the range was 1.817-1.927 billion. This was also lower than the August estimate of 1.867 billion. The old crop balance sheet featured increases in ethanol and exports, resulting in a drop of 55 million bushels in ending stocks from August. World corn ending stocks for 2024/25 were 308.4 million tonnes, versus 309.4 million expected (range 307-312 million) and 310.2 million in August.

PRICE OUTLOOK:
True to history, USDA yields came out well above the average guess, but increases in old crop demand kept ending stocks down from last month. Prices have pulled back slightly on December corn post?report but not dramatically. If the market can climb back toward unchanged or even higher at the close today, that would be additional evidence that prices made an important low in August. Today's low so far at 397 is right on the.618% retracement of the recent 31 cent rally. The weekly chart reversal from 2 weeks ago was bullish remains in control of the technical picture. A move above 410 would point to a run to resistance at 424 and possibly retracement resistance at 427 1/2.

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.