Analyst sees upsides after crop forecast adjustments

The 2024 US soybean harvest is expected to generate record-high yields and production, the US Department of Agriculture (USDA) said Sept. 12 as it reduced slightly its forecast for the latter. The Department slightly raised its forecast for domestic corn yield and production, left unchanged its domestic wheat outlook but forecast smaller global wheat supplies and ending stocks.

In its Sept. 12 Crop Production report, the USDA forecast soybean production at a record-high 4.586 billion bushels, down slightly from the previous forecast but up 10% from 4.1656 billion bushels last year. The Department left unchanged from August its forecast for average soybean yield at a record-high 53.2 bushels per acre, which would be a 2.6-bushel increase from 2023. The area harvested for soybeans in the United States is forecast at 86.3 million acres, unchanged from the previous forecast but up 5% from 2023. Yield forecasts were based on Sept. 1 conditions.

“The weather was good enough during the growing season to realize those yields,” said Bill Lapp, founder and chief economist with Advanced Economic Solutions, Omaha, Nebraska, US. “Dry conditions from mid-August forward have led some observers to doubt it, but the USDA didn’t change it. We’ll have ample supplies, a building soybean carryout and a situation where there will be pressure on soybean prices and, to some degree, the products.”

The USDA raised its forecast for corn production for grain by less than 1% from August to 15.186 billion bushels, which would be down 1% from 2023. Based on conditions as of Sept. 1, yields were expected to average 183.6 bushels per harvested acre, up 0.5 bushels from August and up 6.3 bushels from 2023. The area harvested for grain is forecast at 82.7 million acres, unchanged from the previous forecast but down 4% from the previous year.

“USDA is optimistic, as that would be a record-high average yield by 6 bus an acre,” Lapp said. “As with soybeans, favorable weather throughout the growing season had led us to have these yield prospects. I would not be surprised to see another upward revision to the corn crop in subsequent reports in October or November. The crop was essentially done growing by the time any dry weather arrived.”

The Department, in its World Agricultural Supply and Demand Estimates report on Sept. 12, made no changes to its domestic wheat production or carryover forecasts. The USDA will issue its final US wheat production estimate on Sept. 30.

In the latest WASDE report, the USDA forecast 2024-25 world wheat ending stocks at 257.22 million tonnes, up 600,000 tonnes, or 0.2%, from August but down 8 million tonnes, or 3%, from 265.25 million tonnes in 2023-24. The increase reflected a lower production estimate offset by higher beginning stocks. Beginning stocks were raised primarily for Canada. Statistics Canada substantially raised its 2021-22 and 2022-23 ending stocks estimates and said 2023-24 ending stocks of Canadian wheat were significantly higher than the USDA’s previous estimate.

World wheat production, while lowered 1.4 million tonnes, to 796.9 million in the USDA’s latest forecast, remains a record high. The USDA cited a 4-million-tonne reduction in European Union supplies (to 124 million tonnes) likely to only partially offset higher production for Australia and Ukraine.

“There were upward revisions to Canada’s crop, and there might even be some more upside to that,” Lapp said. “And there was an upward revision to the Ukrainian crop, which is good for both availability of exportable supplies and to offset Europe being hurt by adverse weather as France and Germany finished out their growing season — too much rainfall, primarily.”

Australia’s production was raised 2 million tonnes, to 32 million, on favorable conditions in Western Australia, New South Wales, and Queensland. Ukraine was raised 0.7 million tonnes, to 22.3 million, based on harvest data released by the Ministry of Agriculture.

The USDA forecast world wheat consumption in 2024-25 at 804.9 million tonnes, up 890,000 tonnes from the August projection and up 5.98 million tonnes from 798.92 million tonnes in 2023-24. The USDA forecast world wheat exports in 2024-25 at 216.51 million tonnes, up 1.65 million from the August projection but down 4.98 million tonnes from 221.49 million tonnes in 2023-24. Russia will be the largest wheat exporter in 2024-25. That country’s exports were forecast at 48 million tonnes, unchanged from August but down 7.5 million tonnes from 55.5 million tonnes in 2023-24. Ukraine’s wheat exports were forecast at 15 million tonnes, up 1 million from August but down 3.58 million tonnes from 18.58 million in 2023-24. Australian wheat exports were raised 2 million tonnes, to 25 million tonnes, up 5 million from 2023-24.

US exports were left unchanged from August at 22.45 million tonnes (825 million bushels). Canadian exports were raised 1 million tonnes, to 26 million.

“Given the pace we’ve had, if we continue to see strong export sales of US wheat, we could see an upward revision of, ultimately, 25 million to 50 million bus in exports,” he said. “For now, it’s a very good number.”