USDA Shows 25 million bushel increase in US Wheat stocks in latest WASDE

USDA released its March Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports on Tuesday.

Farm Director, KC Sheperd talked with Rich Nelson of Allendale, where key insights emerged regarding the latest WASDE (World Agricultural Supply and Demand Estimates) report, highlighting the market’s delicate balance amidst trade uncertainties. Nelson’s analysis focused on the surprising increase in U.S. wheat stocks, the looming impact of political decisions on exports, and the trends concerning the beef market.

Wheat Stocks and Trade Volatility:

Nelson pointed to the unexpected surge in U.S. wheat ending stocks, stating, “But wheat… that’s where we saw the surprise. A 25 million bushel increase in US wheat stocks to 819 million bushels.” This deviation from market expectations, he explained, adds pressure to domestic prices and impacts export competitiveness.

The discussion quickly turned to the volatile trade landscape. “Trade wars, potential tariffs… these are wildcards,” Nelson emphasized, stressing the vulnerability of U.S. wheat exports to geopolitical fluctuations. He further addressed the Russia-Ukraine situation, noting, “The Russia-Ukraine war could be a short-term bearish issue if an agreement is made,” while acknowledging the inherent uncertainty of the ongoing conflict.

Cotton Outlook:

Like other commodities, there were no changes in production for cotton. Nelson added that there were no changes in domestic demand or exports. The stock estimates of 4.9 million bales was the highest in the previous two years, but could change as the planting season nears.

Beef Market Concerns:

Nelson also expressed concern regarding the beef market, highlighting the slow rise in U.S. beef production and the concurrent increase in imports. “Beef production is concerning,” he stated. “The slow rise domestically, coupled with the increase in imports, indicates a shift in market dynamics. We need to watch this closely.” This trend signals a potential shift in domestic market dynamics and increased reliance on foreign supply.

WASDE’s Holding Pattern:

Looking ahead, Nelson predicted a period of relative stability in upcoming WASDE reports. “Frankly, I expect the next few WASDE reports to hold relatively steady. Until we get a clearer picture of these trade issues, the numbers are likely to remain in a holding pattern,” he concluded. This “holding pattern” reflects the market’s dependence on clarity regarding trade policies and geopolitical developments.

USDA’s Next Steps and Market Monitoring:

The USDA is set to incorporate upcoming tariffs into future reports, particularly those scheduled for early April, demonstrating the growing influence of political decisions. The agency will also be closely monitoring wheat export estimates, considering the Russia-Ukraine situation and recent U.S. export sales. Additionally, USDA will continue to monitor and potentially adjust beef production and trade estimates.  

Looking Ahead: Prospective Plantings and Grain Stocks:

The upcoming March 31st meeting, where prospective plantings and quarterly grain stocks reports will be discussed, takes on heightened significance. This meeting will provide crucial insights into future supply and demand trends, helping market participants navigate the current landscape of uncertainty.

Nelson said the unexpected rise in wheat stocks, coupled with trade uncertainties and beef market concerns, creates a challenging environment for market participants, and the coming months will be critical in determining the long-term trajectory of these markets.

You can also view the full reports here:

— Crop Production: https://www.nass.usda.gov/…

— World Agricultural Supply and Demand Estimates (WASDE): http://www.usda.gov/…

CORN

USDA held pat on every corn domestic number and made few changes globally.

Corn production for the 2024-25 crop was 14.867 billion bushels (bb). USDA held the national yield at 179.3 bushels per acre. Harvested acres were 82.9 million.

For demand, projected total Feed and Residual use is 5.775 bb. Ethanol use is forecast at 5.5 bb. Total domestic use is forecast at 12.665 bb.

Corn exports are pegged at 2.45 bb.

Ending stocks for the 2024-25 crop were 1.54 bb.

The farmgate price for 2024-25 was $4.35 a bushel.

Globally, USDA also held pat on production for both Brazil and Argentina. Brazil’s production was held at 126 million metric tons (mmt) but Brazil’s exports were also lowered 2 mmt to 44 mmt. Argentina’s production was maintained at 50 mmt and exports at 36 mmt.

Globally, 2024-25 corn beginning stocks came in at 313.95 million metric tons, down 1.86 mmt. Global ending stocks were pegged at 288.94 mmt, down 1.37 mmt.

SOYBEANS

USDA left soybean ending stocks unchanged at 380 million bushels (mb). The agency made no revisions to the supply and demand table, leaving production at 4.37 mb, crush at 2.4 mb and exports at 1.825 mb. The national average farmgate price declined 15 cents to $9.95 per bushel.

Globally, soybean ending stocks were cut nearly 3 million metric tons to 121.41 mmt, due mostly to higher crush. Argentina’s production was left unchanged at 49 mmt; however, its domestic crush use was increased by 1 mmt. Brazil’s 169-mmt production estimate was unchanged.

LIVESTOCK, POULTRY, AND DAIRY:

Historical red meat, poultry, and egg supply and use estimates are adjusted to reflect revisions in slaughter, inventory, cold storage, and production data. Total red meat and poultry production for 2025 is raised on higher beef and chicken
production forecasts, which is partially offset by lower pork and turkey production forecasts. The higher beef production forecast is due to heavier dressed weights more than offsetting lower slaughter. Pork production is lowered on a slower rate of slaughter in the first quarter, partially offset by heavier dressed weights. USDA will release the

Quarterly Hogs and Pigs report on March 27, providing a further indication of hog supplies for slaughter in the second half of the year. Broiler production is raised on improved returns and the latest placement and hatchery data. Turkey production is lowered on the latest hatchery data. Egg production is lowered due to Highly Pathogenic
Avian Influenza (HPAI)-related culling of the egg laying flock through early March that is expected to affect production through the first three quarters of 2025.

The beef export forecast for 2025 is raised, with increased production allowing for additional supplies in the second half of the year. Beef imports are raised on strong shipments during January and continued strong demand for lean processing beef. Pork exports are reduced on lower expected domestic supplies and increased global price competition. Broiler exports are reduced on the latest trade data and continued price competition from global exporters dampening U.S. shipments. Turkey exports are lowered on the lower expected domestic supplies.

Cattle price forecasts are lowered for the first half of 2025 based on recent prices. The second half is unchanged as demand for cattle is expected to remain strong. Hog price forecasts are lowered for the second and third quarters, based on recent prices and slightly weaker demand than previously expected. The broiler price forecast is lowered
based on lower expected prices during the first half of the year. The 2025 turkey price is lowered on recent prices and weaker demand. Egg price forecasts are reduced on latest prices showing a downward turn, as market demand slows after several weeks of increasing prices in response to HPAI-related reductions in production.

The milk production forecast for 2025 is reduced on lower expected output per cow more than offsetting slightly higher cow inventories. Imports are unchanged on a fat basis and reduced on a skim-solids basis. Exports are lowered on a fat basis, primarily due to lower cheese exports. On a skim-solids basis, exports are lowered due to lower expected shipments of cheese, dry skim milk products, and lactose. Domestic use is increased on both a fat and skim-solids basis. Cheese, butter, nonfat dry milk (NDM), and whey price forecasts are all lowered on recent prices. The Class III price is lowered on the lower price expectations for cheese and whey. The Class IV price is also reduced due to lower butter and NDM prices. The all milk price estimate for 2025 is lowered to $21.60 per cwt.

COTTON:

There are no changes to this month’s 2024/25 U.S. cotton balance sheet. The 2024/25 season average upland farm price projection is reduced to 63 cents per pound. For the 2024/25 world cotton balance sheet, production, consumption, and trade are increased while ending stocks are reduced this month. Beginning stocks are unchanged. Higher production for China more than offsets reductions for Pakistan and Argentina. Consumption is raised for Pakistan, Bangladesh and Egypt, more than offsetting small changes elsewhere. Exports by Brazil and Turkey are increased, exceeding reductions for Australia and Egypt. Imports by China are lowered but are more than offset by increases for Pakistan, Bangladesh and Egypt. Ending stocks for 2024/25 are lowered 80,000 bales.