July WASDE preview: Eyes on world stocks

USDA will use last week’s updated acreage figures in Friday’s World Agricultural Supply and Demand Estimates, but is unlikely to make significant changes outside of that, according to a Bloomberg poll of analysts.

Corn stocks are seen falling modestly from June as record demand, evidenced by the June Grain Stocks Report, continues to top even the most bullish expectations. Stocks are still seen as relatively abundant, but are trending lower. Soy stocks are seen as coming in above June, entirely due to increased production due to higher acres. Wheat stocks are down following the downward revision to acres seen in the June Acreage Report. If realized, it would push wheat stocks to historically tight levels. Eyes will be focused on USDA’s export figure in wheat.

USDA typically does not adjust its yield estimate in the July WASDE barring any severe weather issues during planting season. Respondents reflected that in the survey, with most opting for USDA’s trendline yield as their estimate. The bump in soybean production from June is due to higher-than-expected plantings.

Old-crop corn stocks are seen tightening due to higher-than-expected use noted in the June Grain Stocks Report. USDA could adjust use in each of the the three major categories as use in the past quarter has been remarkable. Feed & Residual use seems the most likely to see an upward bump. The increase in Feed & Residual draws question to the size of the 2025 crop, which many suspect was overstated by USDA. While that may be the case, USDA will not adjust production until the September 30 Grain Stocks Report. Any “adjustments” to the 2025 corn crop size will be reflected in an inflated Feed & Residual figure. Still, ethanol use and exports both remain robust and use could be increased there as well.

In terms of soybeans, little change is expected. We continue to believe exports will top expectations in the final quarter of the marketing year and thus hold a lower stocks estimate than most.

Winter wheat production estimates were adjusted lower across the board following the June Acreage Report. Lower planted acres paired with poor crop conditions have analysts anticipating the smallest wheat crop since 1970-71. Lower acres and dryness spurred analysts to cut their spring wheat production estimates as well.

What could ultimately provide a surprise in Friday’s WASDE are world figures. Weather issues are the norm rather than the exception across the globe so far this growing season. Consumption has increased as well as countries look to increase production of biofuels to reduce reliance on energy flows. Grain stocks are seen as lower amid what can likely be attributed to lower production. The disruption in fertilizer flows has not been reflected in USDA’s previous reports and given the recent pick-up in fighting in Iran, winter fertilizer supplies in the southern hemisphere appear to be at risk.