November WASDE: Grain Outlook as U.S. Farmers Finish 2024 Harvest

Harvest for corn and soybeans is well ahead of the five-year pace at 91 percent and 94 percent complete, respectively. Yields for both crops are strong in many parts of the country, and the 2024 harvest still appears to be among the largest in U.S. history.

Many producers will need to rely on above-normal yields to help offset higher crop input prices and lower grain prices. However, production is uneven across the country, and USDA lowered its projected yields for both crops in the November World Agricultural Supply and Demand Estimate (WASDE).

On the demand side, ethanol production is 6 percent higher than last year’s levels and about 8 percent above the 5-year average. Additionally, corn export sales continue to exceed and outpace expectations. Domestic demand for soybeans remains solid due to strong crush margins, but total export commitments for soybeans remain sluggish.

Corn Outlook: Lower Production and Ending Stocks

Markets anticipated slightly lower yields and production for corn, and USDA revised the average corn yield to 183.1 bushels per acre, down from 183.8 in October realized. Projected corn production for 2024/25 is expected to exceed 15.1 billion bushels. If realized, the average yield would be a record and overall production the third largest on record.

Record high yields are forecasted in Illinois, Indiana, Iowa, Louisiana, Michigan, Nebraska, South Dakota and Wisconsin. Figure 1 illustrates a state-by-state map of the USDA’s projected corn yields as of November 1.

However, it is important to compare this year’s yield performance against each state’s 30-year trendline yield. Figure 2 provides insights into this comparison.

Iowa, Illinois, Indiana and Nebraska are among the states projected to see 2024 corn yields that exceed their 30-year trends by 4 percent, 6 percent, 9 percent and 1 percent, respectively. In some regions of these states (and others), higher yields may help producers reduce their cost per bushel and lower the breakeven prices needed to cover expenses.

Figure 2 also highlights the impact of adverse weather. Many Southeastern states, along with Minnesota, Pennsylvania, and Texas, show noticeable declines from their 30-year trends. Yield volatility is prevalent in many of these states, underscoring the importance of a solid risk management strategy each year.

Despite relatively strong ethanol production and export sales, total corn use for 2024/25 remains unchanged from October at 14.99 billion bushels. USDA did reduce ending stocks to 1.94 billion bushels on lower supply, but ending stocks still are likely to be the highest since 20218/19.

The 2024/25 stocks-to-use ratio fell from 13.3% in October to 12.9%, which exceeds the five-year and 10-year averages of 10.6% and 12.4%, respectively. The average corn price held steady at $4.10 per bushel.

Foreign corn production for 2024/25 increased by more than 2.2 million metric tons. Lower production in Mexico was offset by gains from Uganda, Malawi, Belarus, Mozambique, Kenya and Cameroon. The USDA made no changes to 2024/25 corn production estimates for Brazil and Argentina.

While markets correctly anticipated a reduction in world ending stocks from the USDA’s October estimate, the actual figure came in much lower than expected. At 304.1 million metric tons, it was 1.8 million metric tons below the market average. The world stocks-to-use ratio decreased from 25.1% in October to 24.7%, the lowest level since 2013/14.

USDA’s November WASDE report was bullish for corn. On the domestic balance sheet, USDA’s 2024/25 yield estimate of 183.1 bushels per acre was 0.6 bushels lower than the pre-report average and at the lower end of the trading range. On the global balance sheet, USDA’s projected ending stocks also were at the low end of the trading range. December 2024 corn futures closed the day up $0.04 at $4.31 per bushel.

Soybean Outlook: Lower Production, Exports, Crush, and Ending Stocks

Markets anticipated soybean yields to decline slightly to 52.8 bushels per acre, but USDA came in even lower at 51.7, down from 53.1 bushels per acre. If realized, USDA’s revised yield projection still would mean total production of more than 4.46 billion bushels, the second largest in U.S. history. The most significant production adjustments were made for Iowa, Illinois and Minnesota.

Despite USDA’s lower adjustment to Illinois production, the state is expected to see record high soybean yields, as are Arkansas, Indiana, Michigan, Mississippi and Texas. Figure 3 provides a state-by-state breakdown of soybean yield projections as of November 1, 2024.

Similar to corn, strong soybean yields are helping some producers mitigate the impact of lower commodity prices. Figure 4 illustrates each state’s 2024 soybean yield projection compared to their 30-year trendline. While the yields in Iowa, Illinois, Indiana and North Dakota are not a significant departure from their trendlines, they are expected to be relatively strong. Conversely, weather challenges in Ohio, Minnesota, Pennsylvania and many Southeastern states could mean 2024 yields below 30-year trendlines.

On the demand side, USDA lowered both exports and domestic crush estimates compared to October; 2024/25 soybean exports declined 25 million bushels to 1.8 billion on lower supplies and sales to date and crush estimates were down 15 million bushels to 2.4 billion, due to reduced soybean meal disappearance and exports.

Driven by these lower production estimates, USDA cut 2024/25 ending stocks 80 million bushels to 470 million. Notably, this revision fell below the low end of the trading range ahead of the report. Despite the decrease, ending stocks for 2024/25 remain 41 percent above the five-year average and 27 percent above the 10-year average.

The stocks-to-use ratio was lowered from 12.5 percent in October to 10.8 percent. If realized, this would be 2.9 percentage points above the five-year average and 1.8 percentage points above the 10-year average. The season-average soybean price received by producers remained steady at $10.80 per bushel.

Globally, the supply-and-demand outlook indicates lower production, higher exports, reduced crush and lower ending stocks. USDA made no changes to soybean production estimates for Brazil or Argentina for 2024/25. Global soybean production was primarily lowered due to revisions in the U.S. and India.

Markets had anticipated 134 million metric tons in global ending stocks, but USDA reported 131.7 million metric tons. Despite this decrease, global ending stocks remain at a record high. Additionally, the world stocks-to-use ratio stands at 32.4 percent, the highest level since the 2018/19 season.

The November WASDE report was bullish for soybeans, driven by lower revisions to U.S. soybean production. On the domestic balance sheet, USDA’s 2024/25 yield estimates of 51.7 bushels per acre was 1.7 bushels per acre below the pre-report average and at the lower end of the trading range. On the global balance sheet, USDA’s ending stocks estimate also at the low end of the trading range. Consequently, November 2024 soybean futures closed the day up $0.01, reaching $10.16 per bushel.

Wheat Outlook: Slight Increases to Supplies, Usage, and Ending Stocks

The 2024/25 U.S. wheat outlook indicates slightly larger supplies, increased domestic use and higher ending stocks, while exports remain unchanged. The USDA raised imports by 5 million bushels to 120 million, all sourced from Hard Red Spring wheat. Domestic use increased slightly by 2 million bushels, which was entirely attributed to food usage.

Increase domestic use was offset by higher imports, and USDA raised ending stocks by 3 million bushels to 815 million, a 17 percent increase from last year.

The season average farm price declined $0.10 per bushel to $5.60, based on NASS prices reported to date and expectations for futures and cash prices for the remainder of the marketing year. The domestic stocks-to-use ratio remained stable at 41 percent, the highest level since 2019/20.

On the global front, the 2024/25 wheat outlook anticipates larger supplies and consumption, reduced trade and slightly lower stocks. Global supplies are projected to increase 0.7 million metric tons to 1,061 million on higher production.

Kazakhstan is reporting its third-largest crop on record and Turkey also is seeing higher yields. This helps offset reductions from Argentina, Brazil, Russia and the European Union – but not enough in USDA’s view to cut world ending stocks to match market expectations. Ahead of the report, markets projected world ending stocks of 256.8 million metric tons. USDA came in 0.8 million metric tons higher at 257.6 million metric tons.

If realized, world ending stocks would be 8 percent below the five-year average and the lowest since 2015/16. The world stocks-to-use ratio remains at 32.1 percent, approximately 3.6 percentage points and 3.8 percentage points below the five-year and 10-year averages, respectively.