Agricultural Futures on the Rise

Wheat

Wheat futures level off but remain at 8-month low

• Wheat futures remained stable above $5.30 per bushel following the release of the WASDE report.
• 2024/25 U.S. wheat outlook for January shows slightly larger supplies, higher domestic use, unchanged exports, and a small increase in ending stocks.
• Supplies are boosted by higher imports, especially Hard Red Spring wheat, which rise by 5 million bushels to 130 million.
• Exports remain unchanged at 850 million bushels, with offsetting by-class changes.

Corn prices surged on strengthened demand

• Corn futures surged above $4.60 per bushel, reaching their highest level in over 7 months, driven by tight global supplies and robust demand.
• Latest USDA report for 2024/25 indicates a continued contraction in U.S. corn stocks, with ending stocks forecast to fall for the seventh consecutive month, underscoring sustained demand, particularly from ethanol production.
• U.S. production is now expected to drop to 14.9 billion bushels, down by 276 million from December’s estimate of 15.1 billion bushels.
• Globally, maize supplies are the tightest since the 2020/2021 season with global corn stocks revised down to 293.3 million tons.
• Moreover, adverse weather conditions in Argentina threaten to further reduce supply, heightening concerns about export availability.

Soybeans found support on restrained supply

• Soybean futures surpassed $10.10 per bushel on Friday’s session as investors processed the latest WASDE report and ongoing concerns about weather conditions in South America.
• WASDE report indicated a reduction in U.S. soybean production for the 2024/25 season, now projected at 4.4 billion bushels, down by 95 million bushels from the prior estimate, primarily due to lower yields in key states.
• Although imports are slightly higher and exports and crush levels remain steady, U.S. ending stocks are expected to fall to 380 million bushels.
• Global soybean crush is expected to increase, driven by strong demand, particularly from Brazil, while global soybean ending stocks are predicted to drop by 3.5 million tons, primarily due to reduced inventories in the U.S. and Brazil.