Grain prices dip as WASDE data disappoints

USAgNet - 01/15/2024

The latest USDA World Agricultural Supply and Demand Estimates (WASDE) report (Thursday, January 11, 2024) had a significant impact on grain prices, sending most of them into the red. Corn prices saw a 2% decline, while soybeans suffered double-digit losses. Kansas City HRW contracts managed slight gains, but other wheat contracts turned negative.

USDA's bearish data surprised the market, leading to a sell-off in corn and soybean futures. Corn prices dropped almost 2%, with March futures at $4.4875 and May futures at $4.6050. Soybean futures for January and March fell significantly as well.

The central U.S. is expected to receive some much-needed moisture in the coming days, according to NOAA's precipitation map. Meanwhile, Wall Street saw some volatility, with energy futures gaining moderately, including crude oil rising above $72 per barrel.

In the corn market, USDA reported a record average yield of 177.3 bpa, leading to increased production estimates. Corn usage also saw a bump, particularly in ethanol and feed. However, higher supplies pushed 2023/24 corn ending stocks higher, impacting the season-average farm price.

Soybean production estimates also increased, with average yields at 50.6 bpa, leading to higher production estimates. Soybean stocks rose as well, affecting prices. The soybean complex faced some challenges, with soymeal and soy oil prices declining.

In the wheat market, prices were mixed but mostly lower due to spillover weakness from corn and soybeans. USDA's report lowered wheat ending stocks, but winter wheat seedings for the next season are expected to decrease.

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