July WASDE Report Ripe for Modifications

The harvest of Brazil’s safrinha corn crop is just starting to pick up and will get attention in Wednesday’s report. USDA last estimated total Brazilian corn production at 132.0 million metric tons (mmt) or 5.20 bb in June and is expected to increase the estimate slightly to 132.8 mmt in July. Keep in mind Brazil’s current crop is in the 2022-23 season and the new U.S. crop is in the 2023-24 season. USDA’s estimate of world ending corn stocks for 2023-24 is expected to be reduced from 314.0 mmt in June to 312.4 mmt or 12.30 bb on Friday, an estimate that has a long way to go.

SOYBEANS

While corn’s new estimates will revolve around USDA’s higher-than-expected planting estimate of 94.1 million acres, USDA’s new soybean estimates will be working with a lower-than-expected planting estimate of 83.5 million acres in 2023. Dow Jones’ survey expects USDA to lower its yield estimate slightly, from 52.0 bpa to 51.4 bpa, resulting in a new soybean production estimate of 4.250 bb, down from 4.51 bb in June. I suspect USDA will leave the soybean yield estimate unchanged at 52.0 bpa, putting the new-crop estimate near 4.30 bb, but these are minor differences this early in the season.

Dow Jones’ survey expects USDA to slightly increase its estimate of old-crop ending soybean stocks from 230 mb to 235 mb. USDA’s report of June 1 soybean stocks came in 12 mb less than expected at 796 mb on June 30 and the demand estimates for soybeans are looking fairly stable in 2022-23.

For new-crop soybeans, Dow Jones expects USDA to reduce its estimate of ending stocks from 350 mb to 206 mb, the lowest in eight years, if correct. Because there is still plenty of time and demand is a long way off, I anticipate USDA will come in with an ending stocks estimate closer to 250 mb, leaving room for tighter supplies later in the season, if they prove out.

For world soybean stocks in 2023-24, Dow Jones expects USDA to lower its estimate from 123.3 mmt to 120.0 mmt, or 4.41 bb. With South America still months away from planting, there is plenty about 2023-24 we have yet to learn.

WHEAT:

This is the time of year when winter wheat harvests are getting more active in the Northern Hemisphere and with that comes greater attention on USDA’s world crop estimates. In total, Dow Jones’s survey expects almost no change with USDA’s estimate of world ending wheat stocks going from 270.7 mmt in June to 270.8 mmt, or 9.95 bb, on Wednesday. Estimates for all the major wheat growing areas will be watched, including China and India and it is difficult to believe there won’t be some surprises along the way.

For the U.S., Dow Jones expects USDA to lower its estimate of old-crop ending wheat stocks from 598 mb to 583 mb, but the June 30 finding of 580 mb is more likely, the lowest U.S. ending wheat stocks in 16 years. For 2023-24, USDA is expected to tweak its estimate of ending wheat stocks from 562 mb to 565 mb. NASS’s Crop Production report will also get attention, expecting to support a slightly higher production estimate of 1.677 bb for all U.S. wheat. Dow Jones expects to see U.S. winter wheat production adjusted a little higher Wednesday, to 1.154 bb, while other spring wheat production is expected at 471 mb, down from 482 mb a year ago. On the surface, Dow Jones’ expectations for wheat look neutral, but harvest has a way of uncovering surprises.

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Join us for DTN’s webinar at 12:30 p.m. CDT Wednesday as we go through the numbers, discuss what they mean and talk about which estimates are reasonable and which are not. Questions are welcome and registrants will receive a link later for viewing at their convenience.

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