The May World Agricultural Supply and Demand Estimates report is one of the biggest reports USDA publishes throughout the year. It provides a first look at new crop marketing year production, supplies, and usage estimates, updated U.S. winter wheat production estimates, as well as usage revisions for domestic balance sheets and modifications to South American crops currently being harvested.

But for all the build-up surrounding today’s May 2024 WASDE, the markets initially yawned off USDA’s findings. U.S. supplies of corn, soybean, and wheat are expected to balloon in the upcoming marketing year, but slight increases to current marketing year domestic usage are helping to offset any concerns about bearish prices.

Shrinking global wheat stocks headed into the 2024/25 marketing year helped fuel rallies in the wheat market. A 4% annual decline in Russian production due to drought and recent frost damage compounded with production cuts in Ukraine and the European Union to signal supply tightening ahead for global wheat buyers.

USDA made downward revisions to Argentine corn and Brazilian corn and soybean harvests, though the Argentine corn and Brazilian soybean cuts were smaller than the market had been hoping. Both countries have been battling disease, pests and weather problems in recent weeks that will likely limit yields.

Corn

USDA’s latest outlook for corn includes “larger supplies, greater domestic use and exports, and higher ending stocks.” The agency expects 2024 corn production to reach 14.9 billion bushels, which Is 3% below last season’s record-breaking effort. Yields are now expected to reach 181.0 million bushels per acre, which USDA attributes to “a weather-adjusted trend assuming normal planting progress and summer growing season weather.”

On a more bearish note, USDA expects total corn supplies to reach 16.9 million bushels, which is the highest volume since 2017/18. Meantime, forecasted exports increased by 50 million bushels to 2.2 billion. That would make the U.S. the world’s largest exporter for the second consecutive year.

Ending stocks for 2024/25 are trending 80 million bushels higher than last year, and would be the highest since 2018/19 if current trends hold. The season-average farm price for 2024/25 is estimated at $4.40 per bushel, moving 25 cents lower year-over-year.

“Barring any major disruptions from Mother Nature this growing season (which seems highly unlikely at this point as showers are keeping many corn growers from timely plantings this spring), U.S. farmers will grow the country’s fourth-largest corn crop,” according to Farm Futures grain market analyst Jacqueline Holland. “Even with ethanol and export users consuming extra bushels over the past month, the 2024 corn harvest will likely add 100 million more bushels to the U.S. pipeline, with little change in usage expected in the upcoming 2024/25 marketing year.”

Soybeans

USDA’s 2024/25 outlook for soybeans includes higher supplies, crush, exports and ending stocks compared to last year. Production could reach 4.45 billion bushels, which is up 285 million bushels on increased plantings and better yields. Supplies are forecasted at 4.8 billion bushels, which is 8% higher year-over-year.

“The extra 285 million bushels anticipated to be harvested this year will be largely consumed by new domestic crush capacity as well as a revival in export volumes,” Holland says. “U.S. soybean supplies have run largely hand-to-mouth since China’s 2020 buying spree, so the remaining extra bushels harvested this fall will help to add more liquidity to the U.S. soybean pipeline.”

In the short term, this may present soybean farmers with some bearish price trends, but in the long run the added supply availability will encourage future demand to come online, Holland adds.

The 2024/25 U.S. soybean crush could increase 125 million bushels year-over-year to reach 2.43 billion bushels. And soybean exports are also expected to trend 125 million bushels higher to reach 1.83 billion bushels. That still leaves U.S. share of global soybean exports at 28%, versus a prior five-year average of 32%.

Ending stocks for 2024/25 are expected to move 105 million bushels higher to 445 million. The season-average farm price is forecast at $11.20 per bushel, which is noticeably below last year’s mark of $12.55. Soymeal and soyoil prices are also on the downward slide versus year-ago levels.

Over the next couple of months, it seems as though markets are more concerned with the state of South America’s crops than U.S. yields, Holland notes. However, that could easily shift over the next couple of weeks if U.S. farmers continue to be rained out of fields as the optimal planting window begins to narrow for both corn and soybeans.

Wheat

USDA’s first look at 2024/25 wheat includes larger supplies, modestly higher domestic use, increased exports and higher stocks, which are expected to move 6% higher. All-wheat production is expected to shift 3% higher to 1.858 billion bushels, based partly on a 0.3 bushel-per-acre bump that will lead to average yields of 48.9 bpa.

Exports could trend 55 million bushels higher to reach 775 million bushels. Ending stocks are 11% above last year with 766 million bushels, which is the highest level in four years.

The projected season-average farm price is expected to stumble $1.10 below 2023/24 levels to $6.00 per bushel.

“In recent weeks, U.S. wheat shipments have inched higher as the dollar has weakened slightly, allowing U.S. wheat to compete slightly more effectively against international competitors,” Holland says. “USDA made a slight addition to 2023/24 wheat export volumes, but at 715 million bushels, the total remains the smallest annual volume of U.S. wheat shipments to international customers since 1971/72.”