Here comes one of the most anticipated USDA reports of the year.
The May World Agricultural Supply and Demand Estimates (WASDE) report is set for release at 11 a.m. CT Tueday. It’s closely watched because it offers the department’s first stab at new-crop balance sheets.
Little movement is expected in the old-crop figures. Analysts surveyed by Reuters expect USDA to slightly raise its old-crop (2025-26) corn ending stocks figure to 2.131 billion bushels from 2.127 billion bushels in April. Old-crop corn demand continues to run strong, and ahead of the pace needed to his USDA’s marketing year estimate. Wheat is seen at 934 million bushels, down slightly from 938 million bushels last month. Soybean ending stocks are seen at 345 million bushels, down 5 million bushels from the previous estimate. Crush continues to run strong, while exports have lagged the pace necessary to hit USDA’s target.
As for those new-crop estimates, corn is seen at 1.933 billion bushels, reflecting a drop in acres and yields in line with USDA’s trendline projections from earlier this year. Wheat is seen at 833 million bushels and soybeans at 364 million bushels.
Over the past 30 years, on average, USDA’s initial forecast for soybean ending stocks is 78 million bushels higher than the final estimate. For corn that disparity is even wider at 129 million
bushels higher than the initial forecast. With fuel and fertilizer prices rising sharply this spring, that further exacerbates the variability around potential yields as farmers may cut inputs to save costs.
Due to winter wheat already being planted and the agency including survey yield data in this report, the margin of error in ending stocks is smaller, and averages 51 million bushels lower than the final.
The May WASDE is generally neutral in terms of the direction it moves the price of row crops, with July HRW and SRW wheat futures ending the day of the WASDE release higher 14 times in the past 30 years, December corn higher 16 times, and November soybeans higher for 12 times. In absolute values, the change in price is 11 3/4 cents for July HRW wheat, 10 1/4 cents for July SRW wheat, 7 cents for December corn, and 11 1/4 cents for November soybeans. Still, outliers are possible. 2022’s initial forecast sent wheat futures soaring, with KC July wheat rising 69 1/2 cents following the release that compounded on worries of lower production from the Black Sea at that time.