The following is an analysis of the USDA projections for the 2024/25 crop years from OSU Grain Marketing Economist Emeritus Dr. Kim Anderson:
At the USDA’s 2024 Annual Outlook Forum, the USDA released projections for the 2024/25 crop years. These projections differ from the monthly WASDE (World Agricultural Supply and Demand Estimates). The WASDE report estimates are the result of surveys. The projections for the Outlook Forum are generated with computer models.
After the projections were released, commodity futures prices for wheat, corn, and soybean 2024 harvest prices all closed lower. The July24 hard red winter wheat contract price was down 12.5 cents, the Dec24 corn contract price was down 7.5 cents, and the Nov24 soybean contract price was down 14.25 cents.
All U.S. wheat planted acres are projected to be 47.0 million acres (ma) compared to 49.6 ma for 2023 and an average trade estimate of 47.5 ma. Wheat production was projected to be 1.9 billion bushels (bb) compared to 1.812 bb in 2023 and an average trade estimate of 1.886 bb. Wheat ending stocks were projected to increase from 658 million bushels (mb) to 769 mb and the average trade estimate was 717 mb. The USDA wheat projections were all above trade expectations.
The USDA projects the 2024/25 wheat marketing year average price to be $6 compared to the WASDE estimate of $7.20 for the 2023/24 wheat marketing year. This implies that 2024/25 marketing year prices are expected to $1.20 less than 2023/24 prices.
Wheat may be forward contracted for 2024 harvest delivery in Pond Creek, Oklahoma for $5.09. The Altus Oklahoma forward contract price is $4.84.
I personally believe 2024 Oklahoma June prices will average in the $5.50 range. I’ve been wrong before.
The USDA projected 2024 corn planted acres to be 91 million acres (ma) compared to 94.6 ma in 2023. This is below the trades’ 91.8 ma estimate.
U.S. corn production was projected to be 15.04 billion bushels (bb) compared to 15.3 bb last year and a trade estimate of 15.15 bb. Corn ending stocks were projected to increase from 2.172 bb to 2.532 bb. The USDA estimate was below the trades’ 2.594 estimate. The Dec24 corn futures contract closed 6 cents lower. With USDA’s corn ending stocks estimate below the trade estimate, you would expect a neutral corn price reaction.
Corn may be forward contract for 2024 harvest delivery in Pond Creek for $4.32. The well above average projected corn ending stocks does imply below average corn prices.
The USDA did project the 2024/25 corn marketing year average price to be $4.40 compared to $4.80 for the 2023/24 corn marketing year. The projected corn ending stocks supports the $4.40 price.
USDA’s soybean planted acres, production and ending stocks estimates were all above the trade’s estimates and last year’s numbers. Yet, soybean prices on the Nov24 soybean futures contract were only down 10 cents.
The USDA projects the U.S 2024/25 soybean marketing year price to be $11.20 compared to $12.63 for 2023/24. Soybeans may be forward contracted for harvest delivery in Pond Creek for $10.66.
The estimates provided at the 2024 Annual Outlook Forum are the first estimates of the 2024/25 marketing year. These estimates are probably the best available but, it’s a long time before harvest and nothing has been said about the world supply and demand situations.
A lot will happen between now and harvest.
