Neutral report after renewed attack by USDA – Ohio Ag Net

Author: Doug Tenney, Leist Mercantile

Report highlights: USDA… again!! No change in corn and soybeans, milling and exports.

Trade Expectations: U.S. or compressed soybean exports will decline while 2023/24 U.S. soybean ending stocks will increase. Lower corn and soybean production was also expected in Brazil and Argentina.

After the midday release of the USDA report, corn fell 1 cent, soybeans fell 4 cents and wheat fell 12 cents. Just before the report was released, corn fell 2 cents, soybeans fell 1 cent and wheat fell 10 cents.

2023/24 U.S. ending stocks: corn 2,022 billion bushels, last month 2.022 billion bushels; soybeans 350 million bushels, last month 340 million bushels; and wheat 688 million bushels, last month 688 million bushels.

Trader’s 2023/24 year-end estimates were: corn 2.009 billion bushels, soybeans 346 million bushels and wheat 688 million bushels.

US ending stocks for 2024/25: corn 2.102 billion bushels, last month 2.102; soybeans 455 million bushels, last month 445 million bushels; and wheat 758 million bushels, last month 766 million bushels.

Trader’s 2024/25 year-end estimates were: corn 2.079 billion bushels, soybeans 448 million bushels and wheat 778 million bushels

The USDA estimates Brazil’s soybean production this month at 153 million tons, up from 154 million tons last month. Corn production in Brazil was estimated at 122 million tons, last month it was 122 million tons. Soybean production in Argentina was 50 million tons, last month it was 50 million tons.

Corn production in Argentina was estimated at 53 million tons, last month it was 53 million tons.

This morning, the USDA announced the sale of 106,000 tons of old US soybeans to China. U.S. soybean sales to China have been restricted in 2024. Last week, Brazil proposed a 20% tax increase that has not yet been approved by Congress. Brazilian producers quickly reacted with their hands in their pockets, refusing to sell, knowing that they would potentially make 20% less if they sold soybeans. Reports this morning indicated that Congress was not thrilled with the proposal. Last week, soybean prices rose quickly on June 6, closing up 16 to 22 cents on the news. However, the very next day the price of soybeans dropped by 9-20 cents.

Keep in mind that mainstream investors could easily label a neutral report as bearish. Why? Because neutrality is not bullish.

American producers actively sold wheat in May. The July 2024 CBOT Index rose to $7.20 on May 28, a significant increase from the May 1 low of $5.93 ½. From that high in late May, July wheat quickly retreated to $6.06 this week. Moreover, July 2025 wheat reached $7.55 in the same rally. The wheat rally was held in connection with the news about May frosts and frosts in Russia. This price action is a classic example of the old-timer’s saying: “buy the rumor, sell the fact.”

Markets have changed radically in recent years. For weeks, it had been difficult to hold multi-week weather or news-demanding rallies with any frequency. Instead, recent increases have often lasted just a few days, often followed by weeks of price declines.

Traders continue to compare Brazilian corn and soybean production to CONAB estimates in Brazil to USDA estimates. The USDA is slowly changing the numbers dramatically as their decades-old mantra of “getting the direction right” is still a theme they stick to.

The weather will quickly return to the top of the next news. Just remember that you can see three weather forecasts every day. Life comes at you fast. Ohio will experience at least six days of daytime highs of 90 degrees next week. By early next week, these daytime highs could reach the mid-90s.

Expect weather to be a factor until late July. Its effects can be profound.