The agricultural markets received a wave of fresh data as the U.S. Department of Agriculture released its latest World Agricultural Supply and Demand Estimates. In this comprehensive July WASDE Report Analysis, Farm Director KC Sheperd sat down with Allendale’s Rich Nelson to break down the surprising adjustments across multiple commodity sectors. This specific July report is critical as it incorporates the final numbers from the June grain stocks report—updating old crop feed residual—alongside the updated acreage data from June 30.
Wheat Ending Stocks Tighten to Three-Year Low
The wheat marketing year concluded on May 31, allowing the USDA to finalize old crop ending stocks with a well-anticipated 15 million bushel decline. This reduction directly carried over into the new crop balance sheet.
With lower beginning stocks and a minor production cut of roughly 7 million bushels, the USDA lowered new crop wheat ending stocks by 22 million bushels, bringing the total down to 722 million bushels. This represents the smallest U.S. wheat ending stocks in approximately three years, providing a slightly supportive undertone for the market.
On the global stage, tightening supplies remain a key story. Rich Nelson explained that outside of temporary news—such as Russia halting exports in one area due to Ukraine attacks—the market is heavily focused on non-U.S. production and exports. Furthermore, the developing Super El Niño is expected to impact upcoming fourth-quarter harvests in India and Australia, which could trigger sharper production cuts and dramatic headlines later this year.
Corn Market Shifts to a Bullish Outlook
The corn sector emerged as one of the most notably bullish areas of the report. The USDA lowered old crop ending stocks by over 120 million bushels, a substantial drop driven primarily by a robust increase in feed residual numbers.
On the new crop side, while corn acreage adjustments were minimal and trend yields remained unchanged, the USDA still cut 150 million bushels off its previous new crop ending stocks estimate. This brings the projection down below 1.8 billion bushels.
Rich Nelson noted that while these numbers look highly supportive and bullish on paper using trend yields, the market itself is currently trading with a light yield premium. He cautioned that traders are not exactly trading the USDA’s exact balance sheet right now because the next two weeks will serve as a significant turning point for determining actual U.S. corn yields, which could easily move higher or lower.
Soybeans Maintain Support Despite Higher Production
The soybean balance sheet also showed resilient strength. Old crop ending stocks saw a minor reduction of 10 million bushels. For the new crop, the USDA integrated the 700,000 additional acres reported in late June. While yields were left unchanged, the resulting increase in production was entirely offset by an increase in demand.
As a result, the USDA maintained a bullish-leaning new crop ending stock figure of 310 million bushels. Addressing skepticism in the trade regarding aggressive export numbers, Rich Nelson pointed out that the USDA actually raised export estimates by another 30 million bushels in this report, signaling strong confidence in demand.
Cotton Supply Expands on Higher Acreage and Yields
Unlike grains, the cotton market experienced an expansion in supply. Following the acreage update from June 30, cotton plantings were raised by about 200,000 acres.
Additionally, the USDA increased its yield estimate from 866 pounds per acre last month up to 872 pounds per acre. This combination of higher acres and improved yields pushed ending stocks from 3.7 million bales up to 4.1 million bales, returning the market to stock levels seen over the past two years. Demand strength remains a question mark as the trade continues to monitor export potential and buying patterns from China.
Livestock Outlook: Positive for Beef, Neutral for Pork
The livestock sector revealed contrasting adjustments between beef and pork. The USDA lowered its current-year beef production estimate to 25.3 billion pounds, a reduction of about 160 million pounds from last month’s forecast. Coupled with a surprising reduction in import numbers—which had been rising for several consecutive months—the beef sector presents a positive market story characterized by tightening production and lower imports.
Conversely, pork data remained relatively neutral. The USDA made a minor 40 million pound reduction to pork production, though supplies remain higher than last year. However, this minor cut was balanced out by a slight increase in imports and a reduction in export estimates, keeping the overall pork outlook steady.
Weather and Yields Take Center Stage
Looking ahead, the market’s focus will shift entirely to weather conditions and crop yields. Rich Nelson emphasized that the next two weeks are absolutely critical for corn, as more than 60 percent of the nation’s corn yields are determined during this brief window. While the market currently prices in a premium above trend yields, upcoming temperature spikes and moisture distribution across the Plains and Western Corn Belt will ultimately decide where these balance sheets head.
You can also view the full reports here:
— World Agricultural Supply and Demand Estimates (WASDE):
