WASDE update: Higher US corn and soybean supplies

The USDA revised up its 2023/24 US corn production estimates by 108m bushels to a record 15.34bn bushels due to higher yields. This was above market expectations of around 15.22bn bushels. The yield estimates were increased by 2.4bu/acre to 177.3bu/acre. As a result, US ending stocks for 2023/24 were increased to 2.2bn bushels, up 31m bushels from the previous estimate, and above the roughly 2.1bn bushels the market was expecting.

For the global balance, 2023/24 ending stock estimates were revised up from 315.2mt to 325.2mt primarily due to larger supplies. The market was expecting a number closer to 313mt. Global corn production estimates rose by 13.7mt to 1,235.7mt, driven by an increase in the US (+2.7mt), and China (+11.8mt).

Revisions to both the US and global balance were bearish, which is well reflected in the price action following the release.

The USDA raised 2023/24 US soybean production estimates from 4,129m bushels to 4,165m bushels with yields revised up from 49.9 bushels/acre to 50.6 bushels/acre. As a result, ending stock estimates for 2023/24 were increased by 35m bushels to 280m bushels. This was quite a bit higher than expectations of around 245m bushels.

Only marginal changes were seen in the global balance, which meant that global soybean ending stocks for 2023/24 increased by just 0.4mt to 114.6mt. Global production estimates were largely left unchanged at around 399mt as gains in Argentina, the US and Paraguay were offset by revisions lower in Brazilian supply.

Overall, larger-than-expected ending stocks in the release were bearish for the soybean market.

The USDA decreased its US ending stocks estimate for 2023/24 from 659m bushels to 648m bushels following a reduction in beginning stocks. This was lower than market expectations of around 659m bushels. Meanwhile, the agency left production and export estimates unchanged at 1.8bn bushels and 725m bushels, respectively.

For the global market, the USDA increased its 2023/24 ending stocks estimate from 258.2mt to 260mt, largely on account of higher stocks at the start of the year. The market had largely expected global ending stocks to remain roughly unchanged. The agency revised up its demand estimates to 796.4mt from 794.7mt, driven by India (+1.3mt), and the EU (+1mt). However, higher demand estimates were offset by an increase in production estimates from 783mt to 784.9mt. This was due to increases from Russia (+1mt), Ukraine (+0.9mt), and Saudi Arabia (+1.5mt).