Grain Prices Under Pressure After Bearish WASDE Report

Agriculture - Bearish WASDE

Grain prices came under pressure yesterday after a fairly bearish WASDE report. In its latest monthly update, the USDA revised up its 2023/24 US corn output estimate by 170m bushels to 15.2bn bushels, due to an upward revision in yields. As a result, 2023/24  ending stock estimates are now seen at 2.16bn bushels, up 45m bushels from last month’s estimate and above market expectations of around 2.14bn bushels. For the global corn balance, 2023/24 ending stock projections were revised up - from 312.4mt to 315mt primarily due to larger supplies and higher beginning stocks. This was above the roughly 312mt the market was expecting.

For soybeans, the agency revised up its 2023/24 US soybean production estimates from 4,104m bushels to 4,129m bushels on the back of better yields. Stronger output means that ending stocks were revised by up by 25m bushels to 245m bushels, higher than market expectations of around 225m bushels. Meanwhile, global soybean ending stock estimates were revised down from 115.6mt to 114.5mt, primarily due to lower beginning stocks amid flat demand. This is slightly below what the market was expecting.

Finally for wheat, the USDA increased its 2023/24 US ending stocks estimates from 670m bushels to 684m bushels following a drop in domestic use. The market was expecting stocks to remain unchanged from last month’s estimate. As for the global wheat balance, 2023/24 ending stock estimates were increased from 258.1mt to 258.7mt, slightly above expectations of around 257.8mt.