July WASDE: US Corn Baleout
Rabobank's price outlook based on the USDA's July WASDE
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Soybeans - slightly bearish - US acreage cuts leave ending stockpiles at 300mbu
• US 2023/24 production was estimated at 4.30 bn bushels (-210mbu MOM), following acreage reduction (-4m acres). US total use of soy is expected at -3% YOY; exports are cut 125mbu and crush is lowered 10mbu. US 2023/24 ending stockpiles are pegged at 300mbu, -50mbu MOM.
• Brazil’s 22/23 soy exports rise 1m mt MOM to offset US and Argentina losses, and some global demand is lost.
Corn – bearish –US 23/24 acreage rise "bales out" drought hit supplies, leaves stockpiles elevated
• USDA’s 23/24 production forecast is maintained at 15.3bn bu (+11.6% YOY) after farmers planted the third highest acreage ever, fully offsetting a drought-caused 4 bu/acre yield cut. A US demand recovery, limited by strong competition from Brazil, can’t prevent ending stockpiles of 2.26bn bushels.
• Brazil’s harvest is unchanged. Ukraine’s production and export expectations are both raised by 0.5mmt MOM, but exports are still down a massive 30% YOY due to expected export restrictions.
Wheat – bearish for US balance sheet - yields came in higher than expected
• US production was raised 74mbu MOM to 1,739mbu
• For the global balance sheet we saw cuts to EU, Argentina and Canada production, none of these came as surprises.