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The USDA’s smaller old crop US wheat stocks, smaller 2024 US winter wheat USDA crop forecast than expected, and World Board’s decline in their World ending stocks combined to prompt this food grain to led the CBOT’s prices higher. The Ag Department also increasing corn’s old-crop demand by 100 million bu by upping both ethanol and export demand was also a positive for its price when the trade wasn’t looking for any real change. Soybeans broke initially on no change in their old-crop stocks & hefty 2024/25 stock level that were above the trade’s expectations. The World Board’s limited changes in its S America’s soybean crops seem to limit the trade’s negativity to the US stocks.

The World Board increased 2023/24’s US wheat exports by 10 million to 720 million which dipped the US exporting stocks to 688 million. Some reduced 2024 Black Sea outlooks and slightly stronger demand because of recent lower prices seem to be behind the USDA’s 4 mmt lower world-ending stocks in 2024/25. This would be the lowest world carryover of 253.6 mmt since 2015/16. However, the USDA’s lower-than-expected harvested US Soft Red acres and yields that reduced 2024’s initial US winter wheat output to 1.278 billion bu, down 38 million bu from the trade’s average estimate was the big surprise. Hard red and PNW’s white were slightly higher the trade expectations, but May’s USDA soft red forecast was 60 million smaller at 344 mil than the trade. Overall, the World Board’s 1.858 billion bu crop was 30 million below the trade’s 1.888 bil estimate.

The USDA’s increase in US old-crop demand by 50 million bu each of ethanol and exports was corn’s reason for higher post-report prices. This decline in 2023/24’s ending to 2.022 bil bu along with 2024’s sharp drop of 4.4 million harvested acres reduced this year’s corn output by 482 million when the USDA kept its 2024 US yield forecast at 181 bu per acre. Overall, corn’s ending stocks were 182 million bu below the trade’s average estimate. Worldwide, the USDA cut its corn carryover by 5 mmt vs last year and 1.6 mmt below the trade’s average estimate this month. However, the World Board’s very modest reductions in their S American corn crop forecast has many traders nervous. Despite Argentine shunt disease reports dropping 10% or more from the USDA’s 55 mmt April projection and hefty rain Brazil’s RGDS in the past 2-3 weeks, the USDA only sliced 2 mmt of Argentina’s output & 2 mmt from Brazil’s corn output. This year’s US corn planting pace will become more of a market factor this coming week. Recent rainfall has likely slowed the US planting pace below corn’s 70% level by May 15. In the past, a seeding rate at or above this level have occurred for US bean yields to produce an above-normal yield.

Today’s soybean data didn’t provide any initial spark when the USDA left its US 2023/24 US ending stocks unchanged vs April when no demand changes were made. The World Board also sliced 50 million from their Feb Ag Outlook export outlook and kept their 2024 US yield at 52 bu. This pushed their 2024/25new crop stocks out outlook to 445 million bu. However, the modest changes in the USDA’s S American soybean crops given the past month’s weather and ongoing strength in wheat and corn prices lifted the soy complex by the ending bell, today. Despite Argentina’s dryness & the hefty 10-25 inch Brazilian rains in RGDS the past 2-3 weeks, the World Board left its Argentine estimate at 50 mmt & only sliced 1 mmt from Brazil’s April to 154 mmt. Given bean reports of 47.5 to 49 mmt from Argentina’s exchanges and the likely spoiling (mold) of Brazil’s RGDS crop before it can all be harvested, many traders remain cautious about these crop levels. Similar to corn, the US weather hasn’t provided many extended planting period in the Midwest this past week. The prospect of having 50% of the US soybeans being planting by May 15 doesn’t seem likely either for the best production outlook. 

Overall, the US CBOT prices appear to be nervous both the S American final crop sizes & the US spring planting paces for corn and soybeans. July price action above $4.72 in corn and $6.66 in Chi wheat could open up with follow-through strength to $4.85 -92 and $6.70 -7.00 levels, particularly if rains keep planters out of the fields. The recent $12.50-60 July range will remain a nearby barrier as talk of US plantings being switch from corn to beans potentially if the coming week’s weather doesn’t improve. 

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