Wasde: Hedgepoint analyzes key trends for soybeans, corn and wheat

Soybeans: USDA confirms small correction in US Ending Stocks

This month, the USDA brought some interesting updates regarding the US numbers. Hedgepoint Global Markets analyzes the results in a report.

“The USDA raised the US 24/25 soybean crop number to a record 124.9 M mt, exceeding analyst expectations and last month's forecast. The same situation happened with the Final Stocks, which is projected at 12.5 Mt/ ha, well above the expected 12.6 Mt/ ha and the previous month's number. Finally, the yield per acre reached 1.44 Mt/ha, 0.03 Mt/ha above the previous report”, says Ignacio Espinola, Grains analyst at Hedgepoint.

August is the most important month for soybean crop development, and traders will closely monitor the weather in the US Midwest, which so far is expected to be largely beneficial.

“On the South American side, there are not many things worth mentioning. In relation to the 23/24 harvest, Argentina's number was reduced once again by 0,5 M mt, leaving a final number at 49 M mt, which we agreed, and Brazil's production number remained unchanged, at 153 M a lot”, he points out.

Corn: US corn production is in line with market expectations

On the US side, there was an increase in corn productivity to 183,1 bu/acre (4,65 Mt/ha) followed by a reduction in planted area that did not greatly affect ending stocks and total production numbers.

“Still, a production of 384.7 Mt represents the third largest corn harvest in the history of the United States”, highlights the analyst.

“In South America, and as stated in our Pre-WASDE report, we expected some adjustment in Argentine production. The report reduced Argentina's reading by 2 M mt, leaving total production at 50 M mt, we still think there is room for a reduction to 46,5 M mt which, in our opinion, is the most realistic number”, he states.

It appears that the USDA is taking its time and will adjust the final number slowly in upcoming reports as it has been cutting between 2-1 M mt each month.

“On the Brazilian side, the report came unchanged. Let’s remember that CONAB’s number was closer to 116 M mt and our number remains at 119 M mt for 23/24 corn production in Brazil”, points out Ignacio.

He concludes: “In short, we should see a neutral to slightly bullish market, considering the adjustments noted in this report. Funds are still low and it seems that the market has a lot of activity on the corn side.”

Wheat: no updates from Europe, tone is still bearish, bringing opportunity for demand

As expected, the USDA did not bring much news for wheat. On the US side, there is a reduction in ending stocks of 0.8 M Mt leaving a final number at 22.5 M Mt. On the production side, there was also an adjustment leaving the US harvest at 53.9 M mt versus 54.7 M mt.

“The concern about European production and especially French production (potentially the worst harvest in 41 years) is what the market is monitoring. Furthermore, the good news about the latest GASC auction, in which the Egyptian government launched its largest auction in history for 3,8 Mt in deferred positions (October 2024 to April 2025) may bring some ideas about the future curve prices”, he believes.

To conclude, this was a neutral to slightly bullish report for wheat as we await confirmation of European harvest estimates.