The August 2024 World Agricultural Supply and Demand Estimates (WASDE) report included indicators of record yields and production, lower average prices, and some mixed market signals in the week that followed the release. On August 12, the USDA released the WASDE report projecting a record corn yield of 183.1 bushels per acre. The increased corn yield more than offsets a reduction in harvested acres, resulting in a forecast of 15.15 billion bushels. If realized, total U.S. corn production would be the third-largest corn crop on record, roughly 200 million bushels behind the 15.34 billion bushel record crop of 2023. With increased exports, ending stocks are expected to fall slightly to 2.1 million bushels.
The USDA also reported a record soybean yield of 53.2 bushels per acre, and forecasted record production of 4.59 billion bushels. Even with a small increase in projected exports, ending stocks are projected to increase significantly to 560 million bushels. As a result of these projections, the average farm price for 2024/25 is projected to be $4.20/bu for corn (down 10 cents/bu from the month prior) and $10.80/bu for soybeans (down 30 cents/bu from the month prior).
For cotton, acreage and production estimates were both lowered. Yields are projected at 840 pounds per acre, while planted acres are down about 500 thousand acres. Combined with an expected increase in the abandonment rate from the prior month, production estimates are expected to be 15.11 million bales. Total use also is projected to decline with decreases in both domestic use and exports, resulting in a 4.5 million bale ending stock. Even with lower ending stocks, the average farm price for 2024/25 is projected to be 66 cents/lb (down 2 cents/lb from the month prior).
Long-grain rice production is expected to decline only slightly to 167.2 million hundredweight, with ending stocks following suit, down to 23.2 million hundredweight. The average farm price remained steady at $14.50/cwt.
The week that followed this report was filled with ups and downs, but overall indications of a low-price environment this fall and winter. Table 1 illustrates the last futures market trade price for November/December contracts for corn, soybeans, cotton, and rough rice for each day since August 9, the day before the WASDE release. On August 12, the day of the release, the corn contract increased 6.5 cents from the prior day, with an attempt to stay at the $4/bu mark that didn’t make it through Friday. The November soybean futures price saw a 16.5 cent drop from the prior day and continued to fall thereafter, down to $9.57 by the end of day Friday, marking a one-week drop of 45.4 cents/bu. Meanwhile, cotton appeared to make an attempt at the 70 cent/lb mark after the WASDE release, but ultimately has continued the fall to near 67.24 cents/lb by the end of the week. Rough rice initially dropped 28.5 cents from the prior day, but did rebound to above $15/cwt before pulling back again to close out the week at $14.725/cwt. The reaction to the August WASDE report indicates a continued downward trend in futures prices, with a high likelihood that prices remain depressed through harvest. The 2024/25 marketing year is setting up to be a challenging year for profitability for most farmers. Producers need to ensure they are obtaining the most out of their marketing plans under these challenging circumstances.
Table 1. Futures Market Prices around the August WASDE Report for Nov/Dec Contract Dates for Select Commodities
Note: Prices are the last trade price reported on the given date. The August WASDE report was released at 12pm ET on 8/12.
References:
USDA World Agricultural Supply and Demand Estimates, August 12, 2024. Available at: https://www.usda.gov/oce/commodity/wasde/wasde0824.pdf
Rabinowitz, Adam. “The Week that Followed the August WASDE Report.” Southern Ag Today 4(34.1). August 19, 2024. Permalink
