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OVERVIEW

The USDA provided updated projections for the production of corn and soybeans in the August 12thWorld Agriculture Supply and Demand Estimates (WASDE) #651, reflecting the anticipated 2024 crop. Production values for corn and soybeans were updated from the July edition since they were based on actual field data. Projections of crop size and ending stocks are based on acreage planted, yield, carry-forward levels from 2023, and with the latest assumptions of domestic use and exports.

The August 12th WASDE report predicted that corn would be harvested from 82.7 million acres, down 0.8 percent from the July projection. The soybean crop will be harvested from 86.3 million acres, up 1.2 percent from the July report.

The August WASDE increased the yield value for the 2024 corn crop by 1.2 percent to 183.1 bushels per acre. By comparison yield was 174.9 bushels per acre in 2023. The July soybean yield was increased by 2.3 percent to 53.2 bushels per acre compared to 49.9 bushels per acre in 2023.

The August USDA projection for the ending stocks of corn was down 1.1 percent to 2,073 million bushels. The August USDA projection for the ending stock of soybeans was raised 23.1 percent to 560 million bushels.

The August 2024 WASDE reduced the projection of corn price by 10 cents to 420 cents per bushel. The projected average season price for soybeans was lowered 30 cents to 1,080 cents per bushel. The price of soybean meal was reduced by $10 per ton to $320 per ton. Projected commodity prices suggest stable to lower feed costs for livestock and poultry producers. Row crop farmers will experience lower margins given higher production costs. This situation has contributed to an impasse in the decisions of the respective House and Senate Agriculture Committees regarding allocation of funding for the combination of nutrition support and conservation over farm commodity price supports in the delayed Farm Bill.

Projections for world output included in the August 2024 WASDE report reflect the most recent estimates for the production and export of commodities especially in the Southern Hemisphere with an emphasis on Argentine and Brazil. Economists also evaluated the likely impacts from ongoing hostilities in Ukraine following extensive destruction of agricultural infrastructure by the Russian Federation. It is evident that production and hence exports of wheat, corn and sunflower from Ukraine will be reduced compared to pre-war averages.

It is accepted that USDA projections for export are also based on the perceived intentions and needs of China. This Nation has sharply curtailed purchases of commodities and especially U.S. soybeans during the current market year despite an anticipated transition to a La Nina event and recovery of the Nation’s economy influencing consumer demand for food and fuel.

Reports on volumes of commodities exported are included in weekly editions of EGG-NEWS, derived from USDA-FAS sales data. Weekly Crop Progress reports will be posted through late November

CORN

Based on current yield and acreage projections for the 2024 corn harvest, the August WASDE Report predicted a crop of 15,147 million bushels, up 0.3 percent from July and compared to 15,234 million bushels for the previous 2023 record harvest. The “Feed and Residual” category was held at 5,825 million bushels. The Food and Seed category was lowered by 1.1 percent to 1,390 million bushels. The Ethanol and Byproducts Category was unchanged at 5,450 million bushels consistent with estimated demand for E-10 and higher blends for summer driving. Projected corn exports were raised 3.4 percent to 2,300 million bushels, based on recent orders, and ongoing shipments to China and taking into account the anticipated lower availability of coarse grains from Eastern Europe. For week ending August 9th exports of U.S. corn were 33.1 percent higher for the current market year to date, compared to the corresponding week in the previous market year. The USDA considers world weather patterns in developing projections including the effect of a transition to a La Nina event by the fourth quarter of 2024. The anticipated ending stock of corn in the August WASDE report was down 1.1 percent from the July WASDE to 2,093 million bushels.

The forecast USDA average season farm price for corn in the July WASDE report covering the 2024 crop was reduced 10 cents to 420 cents per bushel. At 14H00 on August 12th after the noon release of the WASDE the CME spot price for corn was 401 cents per bushel, down 3.6 percent from the quotation on July 12th and down 4.5 percent from the August USDA projection.

AUGUST 2024 WASDE #651 Projections For The 2024 Corn Harvest:

1 metric ton = 39.368 bushels

Average Farm Price: 420 cents per bushel. (Down 10 cents per bushel from the July WASDE Report reflecting the 2024 projected crop)

SOYBEANS

Based on a prediction of increased acreage to be planted and adjusted yield, the USDA August WASDE projected the 2024 soybean crop at 4,589 million bushels, up 3.5 percent from July with an estimated yield of 53.2 bushels per acre from 86.3 million acres harvested. Crush volume was unchanged from the July WASDE report at 2,425 million bushels despite increased capacity. Projected exports were raised 1.4 percent to 1,850 million bushels despite reduced exports to China. For week ending August 9th shipments for the current market year are down 15.8 percent from the corresponding week of the previous market year. Ending stocks were anticipated to be 560 million bushels, up a substantial 23.1 percent from the July WASDE report. This was mainly due to the projected 154 million bushel increase in production as compared to the projection in the July WASDE.

There is uncertainty over orders from China for the current market year. This is attributed to competition from Brazil and an assumption of lower requirements for animal feed due to restrictions on pork production by the Central Government. In reality traders in China are obligated to order on a stable or declining market unless faced with shortages. Prior to 2018, China, the largest trading partner for U.S. agricultural commodities, imported the equivalent of 25 percent of U.S. soybeans harvested.

The USDA August 2024 projection for the ex-farm price for soybeans for the 2024 harvest was 30 cents lower from July to 1,080 cents per bushel. At 14H00 on August 12th following release of the WASDE, the CME spot price was 983 cents per bushel, down 7.6 percent compared to the July 12th quotation and 9.0 percent below the August USDA projection.

August 2024 WASDE #651 PROJECTION FOR THE 2024 SOYBEAN HARVEST:-

1 metric ton = 36.74 bushels

Average Farm Price: 1,080 cents per bushel (Down 30 cents from the July 2024 WASDE Report)

SOYBEAN MEAL

The projected production of soybean meal from the 2024 soybean crop will be 57.08 million tons, unchanged since the June WASDE and consistent with the 2,425 million bushel projected soybean crush volume. This figure also corresponds with increased demand for biodiesel and with a proportional increase in U.S. crushing capacity. Production is driven both by exports and domestic consumption for livestock feed and for soy oil supplying the food and biodiesel segments. The projection of domestic use was unchanged 40.125 million tons. Exports were held at 17.50 million tons.

The USDA lowered the ex plant price of soybean meal in the August WASDE by $10 per ton to $320 per ton as an average for the season based on supply and demand considerations as reflected in a stable ending stock of 450,000 tons representing 0.8 percent of supply.

At 14H00 on August 12th the CME spot price for soybean meal was $303 per ton, down 3.5 percent compared to the July 12th CME quotation and 5.3 percent lower than the WASDE projection of $320 per ton.

AUGUST 2024 WASDE #651 PROJECTION OF SOYBEAN MEAL PRODUCTION AND USE

(Quantities in thousand short tons)

A

verage Price ex plant:$320 per ton (Down $10 per ton from the August WASDE Report)

IMPLICATIONS FOR PRODUCTION COST

The price projections based on CME quotations for corn and soybeans suggest lower feed production costs for broilers and eggs. Going forward, prices of commodities will be determined by World supply and demand and U.S. domestic yield, use and exports.

For each 10 cents per bushel change in corn:-

• The cost of egg production would change by 0.45 cent per dozen
• The cost of broiler production would change by 0.25 cent per live pound

For each $10 per ton change in the cost of soybean meal:-

• The cost of egg production would change by 0.35 cent per doze
• The cost of broiler production would change by 0.30 cent per live pound.

WORLD SITUATION

With respect to world coarse grains and oilseeds the June 2024 WASDE Report included the following appraisals by USDA:-

COARSE GRAINS:

“Global coarse grain production for 2024/25 is forecast 8.1 million tons lower to 1.504 billion. This month’s 2024/25 foreign coarse grain outlook is for lower production, trade, and ending stocks relative to last month. Foreign corn production is down based on cuts to the EU, Russia, Serbia, Ukraine, and Moldova. For the EU, Serbia, and Russia, extreme heat and dryness in southeastern Europe and the Southern and North Caucasus districts of Russia during the month of July reduce yield prospects. Corn production for Ukraine is reduced as higher area is more than offset by a decline in yield expectations. Yield is forecast lower based on heat and dryness in key corn regions during July. Area is increased reflecting greater estimated area for 2023/24 based on reported marketing year use to date. Foreign barley for 2024/25 production is virtually unchanged with increases for Kazakhstan, Ukraine, and Kyrgyzstan that are mostly offset by a decline for the EU”.

“Major global coarse grain trade changes for 2024/25 include higher corn exports for the United States but reductions for the EU, Serbia, Ukraine, Russia, and India. Corn imports are raised for India and Zimbabwe but lowered for Iran, Chile, Egypt, Nepal, and Vietnam. Sorghum exports are lowered for the United States with lower imports expected for China. Barley exports are raised for Kazakhstan and Ukraine but reduced for the EU. Foreign corn ending stocks are lower, reflecting declines for the EU, Pakistan, Nigeria, and Serbia that are partly offset by increases for Mexico and India. Global corn stocks, at 310.2 million tons, are down 1.5 million”.

OIL SEEDS:

“Global 2024/25 oilseed production is raised 4.5 million tons to 690.5 million on higher soybean and rapeseed output partly offset by lower sunflower seed, cottonseed, peanuts, and palm kernel. Global rapeseed production is raised 0.9 million tons to 88.8 million mainly on higher area for Russia. Global sunflower seed output is lowered 2.3 million tons to 52.5 million on adverse weather conditions impacting yields in Ukraine, Russia, the EU, Turkey, Serbia, and Moldova”.

“Global 2024/25 soybean production is increased 6.9 million tons to 428.7 million on higher production for the United States, Ukraine, Russia, India, and Benin. Foreign production is revised up based on higher area forecasts from government reports. Global soybean exports are increased 1.0 million tons to 181.2 million on higher exports for the United States, Ukraine, Russia, and Benin partly offset by lower shipments for Argentina. Soybean imports are raised for Egypt, the EU, Iran, and Turkey”.

“Global 2024/25 soybean ending stocks are increased 6.5 million tons to 134.3 million mainly on higher stocks for China, the United States, and Argentina partly offset by lower stocks for Brazil. To note, stock revisions for China and Brazil derive from changes to trade in the 2023/24 year. China’s 2023/24 imports are raised to 111.5 million tons based on higher shipments by exporters. Brazil exports are raised to 105.0 million tons on the strong shipment pace through July”.

World and U.S. Data Combined for Coarse Grains and Oilseeds:-

*Values rounded to one million metric ton

(1 metric ton corn= 39.37 bushels) (“ton” represents 2,000 pounds)