Farmers know all about juggling, after weaving around a series of storms marching across the country this spring. But so far, planting progress is more or less on track. Like that guy spinning plates on the Ed Sullivan show, some drama, but no big crashes. (Sorry non-boomers; you’ll just have to Google it.)

USDA did its own version of this act with the numbers in its World Agricultural Supply and Demand Estimates printed May 10. The trick for the agency: Balancing the rest of the 2023-2024 marketing year with its first monthly forecasts for new crop production, supply and demand in the U.S. and around the world.

To be sure when the data dropped Friday the market looked like it wanted to wobble, with corn and soybean futures gyrating thanks to the usual manipulations of high frequency traders. But worries about wheat and a modest tightening of corn stocks kept the show rolling along, helping the market ignore a seemingly bearish outlook for soybeans.

Most of the discussion headed into the report centered on the data for new crop, along with fallout from deteriorating late season weather in South America. USDA released initial forecasts for U.S. 2024- ‘25 last fall, as part of its farm program budgeting process, and revised these slightly at its February Agricultural Outlook Forum. Traders didn’t expect a whole lot of change to the old crop statistics, and that’s just what they got in soybeans.

But that’s where USDA started providing some entertainment, upping corn demand 50 million bushels each for both exports and ethanol usage. That knocked 100 million off supplies expected to be on hand when the marketing year ends Aug. 31, the amount carried over to become beginning stocks for 2024-2025.

USDA’s forecast for a slight increase in the corn grind for ethanol was right in line with estimates for biofuels put out earlier in the week by the U.S. Energy Information Administration. The export increase is higher than the total for the marketing year forecast by weekly sales data. However, weather woes, which include Europe and the Former Soviet Union, could tighten global feed supplies, perhaps spurring a little late-season business for the U.S.

No corn shocks

USDA’s forecasts for the upcoming marketing year are mostly its own version of statistical spinning that provided opportunities for second guessing but no real surprises either. For the U.S., the agency incorporated March planting intentions and its “adjusted” trend yield of 181 bushels per acre, which assumes normal corn planting speed and summer weather conditions. I use a yield for corn of 179 bpa for my “normal,” which also assumes weather can be bad, and figures in a slightly lower estimate for harvested acreage. So, while USDA put the 2024 corn crop at 14.86 billion bushels, I am at 14.65 billion. I also assume lower demand alongside fewer bushels to sell.

Still, the difference between the bottom lines on my balance sheet and USDA’s are less than 100 million bushels, a veritable drop in the bucket.

If events play out this way it suggests somewhat limited rally potential this summer. Corn futures for 2024 crop delivery peaked into my projected selling range on the post-report rally, with about 50 cents upside potential, likely on a weather scare around pollination. That would take prices above average break-evens, including an allowance for family living expenses.

Soybean politics

Soybeans are a market with more question marks, but that’s par for the course with beans.

USDA didn’t monkey with its U.S. soybean yield much, so our production forecasts are close. But politics, both here and around the world, matter for soybeans. That’s true any year, but especially in an election year.

Domestically, USDA continues to assume growth in biodiesel. And plenty of new crushing capacity is coming online. The question is whether processors will just run efficient new facilities and mothball the older plants if green initiatives stall.

Exports also depend on which way the wind blows through the halls of power around the world. Chinese demand – hurt by an economy that’s still trying to recover and stalled population growth – appears to be easing.

China and the U.S. continue to make nice one day and talk smack about each other the next, so who knows where this relationship is headed? But Brazil wants Chinese investment and has soybeans to offer. Argentina, meanwhile, is still trying to heal generations of mismanagement, and could fall off a debt cliff on a moment’s notice.

Otherwise, if U.S. production holds, our surplus of soybeans will keep growing. Not exactly good news for bulls. Nonetheless, beans will be beans, and the market still has rally potential. A return toward last summer’s nearby highs – closing in on $14 is possible. Maybe.

All these new numbers from USDA will continue to kick around the market while planting continues, setting the stage for summer. As Ed might have said, that’s the “really big shew.” The market keeps turning on reruns – just like Mr. Sullivan, who has been gone for almost 50 years.