USDA Estimates Weigh on Agricultural Commodities

Wheat

Wheat Falls on Softening Demand

• December wheat futures fell to $5.7 per bushel after the USDA raised its global wheat supply outlook.
• US exports remain stronger than in the same period last year for 11 consecutive weeks from early August, totaling an additional 1.85 million mt.
• However, demand is softening, with Egypt – the world’s largest wheat buyer – planning to reduce imports and replace wheat with corn or sorghum in subsidized bread.
• Despite lowering its 2024/25 production estimate, the USDA increased its ending-stocks forecast to 257.7 million mt, exceeding expectations by 1.6 million tonnes.
• However, wheat prices remain close to their recent 3.5 month high of $6.2 as concerns over Black Sea exports help limit losses.

Corn Futures Weaken Amid Stronger than Expected Supply

• December corn futures fell to $4.1 per bushel, retreating from a three-month high of $4.325 on October 2nd, weighed down by ample supply.
• US exports remained unchanged as of October 10 on a yearly basis, but the average weekly exports in September reported -24% m/m, raising extra competitiveness concerns.
• The USDA’s estimate of a 2024 corn harvest at 15.203 billion bushels, slightly below last year’s record but still among the largest in history, heightened concerns of oversupply.
• Additionally, a modest upward revision in average yields to 183.8 bushels per acre also added to the bearish outlook.
• Compounding this, global wheat stocks exceeded forecasts, intensifying downward pressure on corn prices as fewer buyers look for substitutes.

Amplified Supply Drives Soybeans Lower

• November soybean futures continued their decline, slipping below $10 per bushel, the lowest since late August, as improving crop conditions in Brazil and expectations of a bumper harvest in the US weighed on prices.
• US exports fell -6.9% compared to the same period last year.
• Meanwhile, the USDA’s October supply and demand report made marginal downward revisions to US yield and production estimates, now at 53.1 bushels per acre and 4.582 billion bushels for the 2024/25 season; however, output remains on track for a record high.
• Additionally, the delayed crop progress report from NASS indicated that the US soybean harvest was 67% complete as of October 13, 16% ahead of the five-year average.