December WASDE Neutral as USDA Makes Only Slight Adjustments
AgDay 12/11/23 - WASDE Reaction
Generally, the December WASDE sees very few changes as USDA leaves major revisions until the final report in January. However, USDA did lower ending stocks in corn and wheat, as well as cut Brazil soybean production.
USDA left production unchanged on Argentina corn and soybeans plus Brazil corn despite lower estimates from CONAB and private firms. However, it did lower Brazil’s bean crop 2 million metric tons to 161 due to production issues. But market analysts say bigger weather problems are needed in Brazil to move soybeans higher.
DuWayne Bosse, Bolt Marketing says, "I think the trade is starting to realize that even with some drought in Brazil, and we're lowering off those early high record expectations a little bit lower for Brazil, Argentina is going to have twice the crop they had last year because remember last year with their drought, it was cut in half. So, it was a horrible drought there. And if you take the two countries combined, you're still going to end up with a monster soybean production out of South America. And that's probably made the soybean market pullback to $13 last week here."
Domestically, USDA left soybean ending stocks unchanged at 245 million bushels but lowered both corn and wheat ending stocks 25 million bushels by increasing exports. Bosse says for him it was a surprise USDA acknowledged that in this report.
"They increased demand export demand for corn by 25 million bushels. And they did the exact same for wheat, wheat and maybe just a little bit surprised, Michelle. I mean, I understand why they did it. China has been buying a lot of wheat lately, right? I mean, maybe in future reports. We got to increase it a lot. But that was just recent activity. And you'll these reports aren't put together last night, of course, are they they're put together usually about 10 to 14 days ago. So nice to see maybe USDA knew this wheat business was coming?"
World ending stocks were raised slightly for corn at 315 million metric tons, lowered slightly for soybeans and lowered a half million metric tons for wheat. Cotton production was lowered 314,000 bales, with ending stocks cut by 100,000 at 3.1 million bales.
I’m Michelle Rook reporting for AgDay.
