September Post- WASDE Report: Corn Outperforms Expectations, Soybeans and Wheat Steady

The USDA’s September 2024 World Agricultural Supply and Demand Estimates (WASDE) saw a mix of slight surprises for Corn, but was mostly as expected for soybeans and wheat. Corn yields surpassed market expectations, while soybeans and wheat held steady, aligning with trade forecasts.

Corn: Yields Outperform Trade Expectations, Prices May Soften

Corn producers were greeted with an unwelcome yield surprise in the September report, as the U.S. corn yield for 2024/25 was revised upwards to 183.6 bushels per acre. This exceeded the trade expectation of 182.4 bushels per acre (with a range of 180.5 – 183.5), coming in just above the high end of the projected range. This increase in yield contributed to higher total production, which now stands at 15.186 billion bushels, up from 15.147 billion bushels in the August report and exceeding the trade average of 15.076 billion bushels.

While the increased yield suggests favorable growing conditions, it also puts downward pressure on prices. The season-average farmgate price was adjusted down 10 cents to $4.10 per bushel, reflecting a market anticipating strong supply alongside steady demand. However, despite the price dip, the increase in supply was offset by tighter beginning stocks and steady use, which led to a reduction in ending stocks by 16 million bushels to 2.1 billion bushels.

Overall, the trade missed slightly on the corn forecast, with NASS September numbers higher than market expectations on both yield and production.

Soybeans: Right on Target with Trade Expectations

For soybean producers, the September WASDE report brought little in the way of surprises. The U.S. soybean yield for 2024/25 remained steady at 53.2 bushels per acre, in line with both the trade expectation and the August forecast. The harvested area also remained unchanged at 86.271 million acres, and production was nearly identical to last month at 4.586 billion bushels, just a hair below the trade average of 4.589 billion bushels.

Ending stocks were revised down by 10 million bushels to 550 million bushels, reflecting slightly tighter supply conditions due to lower beginning stocks. However, this minor adjustment did not affect the season-average price, which held firm at $10.80 per bushel, consistent with trade expectations.

Wheat: Global Shifts, but U.S. Market Holds Steady

The U.S. wheat outlook remains unchanged in the September WASDE report as expected. The USDA will update Wheat yields at the end of the month in the Small Grains Summary, due the last business day of September.

On the global front, however, the story is more complex. While global wheat supplies were raised by 1.5 million tons to 1,062.1 million tons, driven by higher-than-expected beginning stocks in Canada, production was revised downward by 1.4 million tons to 796.9 million tons. The reduction was primarily due to weather-related challenges in the European Union (EU), where output in France and Germany was hit by unfavorable harvest conditions. EU production fell by 4 million tons, though this was partially offset by higher production in Australia and Ukraine.

Global consumption increased slightly, and world ending stocks were raised by 0.6 million tons to 257.2 million tons, reflecting higher stocks in Canada, Brazil, and Kazakhstan. For U.S. producers, the global market signals potential volatility ahead, with supply disruptions in the EU creating opportunities for U.S. exports.

Though the U.S. wheat market remains stable, the global landscape shows some divergence from expectations. Trade had largely anticipated the global shifts, though the scale of production losses in the EU may have surprised some participants.

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