US Agriculture Market in Distress

Wheat

Prices reversed, exports remain strong

• Wheat prices have fallen below $5.30 per bushel in August, influenced by an optimistic production outlook from Ukraine.
• USDA has raised its forecast for Ukrainian wheat production by 10.8% to 21.6 million tons for 2024-2025, enhancing supply expectations and contributing to the decline in prices.
• Globally, the USDA forecasts wheat production at 798.28 million tons and exports at 214.86 million tons, with ending stocks reduced to 256.62 million tons.
• Average weekly exports in August 2024 have increased by 53% from the same period last year, but prices remain in season low levels.

Corn futures returned to 4-year low, momentum is bearish

• Corn futures plunged below $3.80 per bushel in August, marking the lowest level in over four years due to weak demand and robust supply.
• USDA has raised its US maize production estimate by 1.2 million tonnes to a total of 385 million tonnes, surpassing analysts’ expectations of 384 million tonnes, indicating the largest ending stocks in six years.
• Additionally, total production among key exporters, including the US, Argentina, Brazil, and Ukraine, rose by 0.7 million tonnes to 590 million tonnes, while ending stocks are forecast at 58 million tonnes, the highest since the 2019/20 season.
• Despite significant estimated production and projected exports of 2.3 billion bushels, current market dynamics, alongside attractive ethanol margins, suggest ongoing challenges for corn prices.

Soybeans trade at 2020 levels, ending stocks surged above estimates

• Soybean futures in the US fell to $9.4 per bushel in August, the lowest in four years, after federal agriculture officials forecast a record harvest this autumn.
• USDA increased its 2024 production outlook by 154 million bushels to nearly 4.6 billion due to higher acreage and improved yields.
• Harvest area estimates rose by 1 million acres to 86.3 million, while yield expectations climbed to 53.2 bushels per acre.
• Although soybean export estimates were raised by 25 million bushels, ending stocks surged by 125 million bushels to 560 million.
• Additionally, global ending stocks unexpectedly increased to 134.30 million bushels.