USDA's July WASDE Report

Thursday, July 13, 2023

The U.S. Department of Agriculture (USDA) released its July World Agricultural Supply and Demand Estimates (WASDE) report, which had a significant impact on commodity prices. The report presented an optimistic outlook, which pushed prices into negative territory for all major commodities.

Soybeans were hit the hardest, with the July contract experiencing a swing of 33.25 cents. The prices went from being up 12.75 cents pre-report to down 20.50 cents shortly after the WASDE release. New-crop soybeans saw an even larger swing of 43.5 cents post-report.

USDA reduced soybean acreage by 4 million but left the yield forecast unchanged at 52 bushels per acre. The agency also lowered crush estimates by 10 million bushels and increased beginning stocks. These factors contributed to the negative market response.

In terms of corn, USDA's outlook called for slightly higher supplies and ending stocks. Total U.S. corn production was increased by 55 million bushels based on increased planted and harvested acres. However, there was a four-bushel yield reduction to 177.5 bushels per acre. Despite data showing extreme downward deviations from average precipitation in June, USDA expected timely rainfall and cooler temperatures to moderate the impact on corn crops during early July.

For wheat, USDA projected a total U.S. production of 1.7 billion bushels, down 210 million due to reduced acreage. The yield forecast remained unchanged at 52 bushels per acre. Soybean crush was reduced by 10 million bushels, reflecting a lower soybean meal domestic disappearance forecast. Additionally, exports were reduced by 125 million bushels. As a result, ending stocks for 2023-24 were projected at 300 million bushels, down 50 million from the previous month.

Globally, USDA's wheat outlook anticipated reduced supplies, increased consumption, but lower exports. This led to a decrease in world ending stocks for wheat to 266.5 million tons, marking the fourth consecutive annual decline if realized.

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