Oliver Sloup joined Michelle Rook with AgDay TV and Farm Journal to share his thoughts on today’s grain and livestock trade following the WASDE report and into the weekend.

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WASDE Report Recap

Friday’s USDA report bore few major surprises, but the minor adjustments made were enough to quell bulls’ pre-report optimism. U.S. national average corn yields were bumped to an eye-opening 183.8 BPA, while soybeans were notched 0.1 BPA lower to 53.1. Corn ending stocks managed to slip in just under 2 billion bushels at 1.99 bil bu, while soybean stocks remained unchanged from the Grain Stocks report at 550 mil bu. Wheat ending stocks were down slightly from last month to 812 mil bu, but remained within the expected range. 

Corn

It’s safe to say that there’s a lot of corn out there. On a state-by-state level, Illinois, Iowa, Nebraska, South Dakota, Wisconsin, New York, and Louisiana are all projected to have record yields. But, there remains room for optimism. Ending stocks fell by 58 mil bus as a result of increased exports and domestic use. Corn export activity has been stout over the last 12 weeks, and today’s 25 mil bus increase to 2,325 mil bus is indicative of that. Mexico has done much of the heavy lifting, but China has been a regular customer of late as well. However, It is worth noting that USDA did reduce China’s corn imports from 21 MMT to 19 MMT. On the global balance sheets, world corn production and ending stocks came in lower than last month primarily as a result of diminished harvest results out of Ukraine and Russia. World corn production was pegged 2.3 MMT lower at 1.500 billion tons, while ending stocks were slashed 1.8 MMT to 306.5 tons. 

Soybeans

The modest reduction in national average soybean yields to 53.1 BPA still puts us on pace for a record high. Total production was cut by just 4 mil bu as a result of the yield reduction, and still sits at a lofty 4.6 bil bu. One of the primary reasons for the pessimism after the report’s release was due to increased beginning stocks partially offsetting the total reduction. The demand side of the equation for U.S. soybeans was entirely unchanged. South American production estimates were unsurprisingly left unchanged, and Brazil’s CONAB will be out with their estimates on Tuesday. With more rain in the forecast for Brazil, a large step forward in planting progress may be a boon for price. On the global side, world exports were lowered slightly to 181.5 as a result of Ukraine pulling back, causing global ending stocks to rise 0.1 MMT to 134.6 MMT. 

Wheat

Domestic wheat production was slashed by 9 mil bu from last month to 1,971 mil bu. The decreased production paired with an increase in feed usage resulted in ending stocks falling to 812 mil bu. The global balance sheets for wheat were much more interesting than the domestic figures. USDA reduced global wheat supplies just 1.9 MMT to 1.0603 billion citing reductions primarily in the EU and Russia. USDA erred on the side of optimism regarding Ukrainian harvest prospects, as their production increases partially offset further reductions in global wheat supplies. The situation in Eastern Europe has escalated recently, with commercial ships in the crosshairs in the Black Sea. Russia recently declared a state of emergency in some of their winter wheat production areas, and further reductions in global supplies may serve as a catalyst for higher prices in wheat.