Ep. 27 Highlights of the January 2025 USDA WASDE Report

00;00;10;26 – 00;00;43;28
Scott Stiles
Yeah meeting, meeting season is officially underway for us. guys in extension, I got kicked off last week, actually. But, last Thursday for me and, right ahead, right ahead of the great Arkansas snowstorm. So I was over in Morrilton Thursday. And of course, the snow started moving in that afternoon. And, so anyway, it, I think the interstate actually closed for a time over between Conway and Morrilton.

00;00;44;00 – 00;00;58;25
Riley Smith
Yeah, there was a I saw on Facebook, when that happened, I-40 was shut down. I thought it was like, right out back and, and, a lot of look like a lot of semis were having trouble getting slowed down.

00;00;58;27 – 00;01;31;28
Scott Stiles
Yeah. Yeah. I don’t know if those guys are. They had to spend the night out here on the on the interstate or not. But it did close for a time last Thursday afternoon. But, anyway, we had a good turnout. Attendance at the meeting was really strong. You know, whether it didn’t hurt the numbers any. And, growers were really interested in trying to come up with a plan for 2025 and, and, and what, you know, just try to try to make the best of this situation, right.

00;01;32;01 – 00;01;55;16
Riley Smith
And today I know we’ve been we’ve been beating this dead horse, and we’ll finally get off of it and start a new one. I guess. And but but, we’re going to recap. We’re good. Finally got the final production numbers for, The WASDE Report for 2024. And that’s what you’re going to be talking about today.

00;01;55;18 – 00;02;22;16
Scott Stiles
Yep. Last, the January 10th, last Friday, USDA gave us a lot of reports. We had, the monthly supply demand numbers and as well as the annual crop production. So we got some final yields, from that. And we, we did get final yields for, corn, rice and soybeans. And we’ll get a final cotton yield in May.

00;02;22;19 – 00;02;49;29
Scott Stiles
But, the interesting thing, at least for Arkansas, was all the major crops are projected to have record yields in 2024. So that was really, I guess, the bright spot out of at all the numbers, at least for out of the crop production was just the yields are really impressive, that we had in 24. Right.

00;02;50;02 – 00;02;50;08
Scott Stiles
Yeah.

00;02;50;10 – 00;03;21;12
Riley Smith
Know before we get started, I almost completely forgot my entry. So good morning. Good morning. Welcome to another episode of Morning Coffee and AG Markets. with your host, Riley Smith. As I already announced, we got Mr. Scott Stiles on the on a zoom call, virtual podcast this morning. And, like, we already said, we’re talking about the the January WASDE report that USDA released, talking about, those final production numbers.

00;03;21;12 – 00;03;42;03
Riley Smith
And that’s what me and Mr. Scott are going to deep dive into today or more more him so than me. So I guess, before we get, we already kind of dove into it a little bit. But before we really get to digging up what, what USDA had to say. What was the biggest highlight that you seen?

00;03;42;23 – 00;03;49;22
Riley Smith
Could be individual commodity or overall commodities for the state of Arkansas and for the U.S as a whole.

00;03;49;24 – 00;04;15;24
Scott Stiles
Well, you know, the growers have been saying, as they get into harvest in 24 that they were really surprised at, at the yields, that they were, that they were seeing and, and Nash reflected that in their numbers that they released, last Friday. We had a new, new record, just as I mentioned, for all the major crops.

00;04;15;27 – 00;04;51;10
Scott Stiles
Rice came in at 170 bushels, corn at 187, soybeans at 55. And as I mentioned, the the preliminary, yield estimate for cotton would be a record two. And it, is estimated at 1,313 pounds. But again, we’ll get a final, yield estimate for cotton in in May. There were still, still some jeans running, as the, you know, as that January data was released.

00;04;51;10 – 00;05;14;28
Scott Stiles
So we, you know, we hadn’t seen, you know, all the final numbers from the gins in the state. And, so we’ll get that, in May, but, we had, you know, the yields are impressive. In other parts of the country, we had a record rice yield in the US and record corn yield in the US.

00;05;15;00 – 00;05;43;23
Scott Stiles
The number of states had record rice yields besides Arkansas, Texas, Missouri, Mississippi, all had record ratios. So, so fairly, you know, I mean, good. And there I guess that would be the highlight that I would, I would say of 24 would be the yield. And, of course, we needed the good yields to. Certainly try to help with the, with the price, the price drop that we saw over the course of the year.

00;05;44;00 – 00;05;56;24
Riley Smith
Absolutely. It’s, I’m not quite sure if there was anything else positive outside of having record yields for 2024. Unfortunately. But

00;05;56;26 – 00;05;58;13
Scott Stiles
yeah.

00;05;58;16 – 00;06;30;21
Riley Smith
I know that, after talking with Hunter and Ryan last week about, that net return calculator that profits a profit loss generator, I know a lot of, a lot of people are starting to use it and, utilize it, just getting a general idea of what their breakeven prices would be and break even yields based on, their, yield amount and, as well as what their, what price they received, being able to help them, you know, determine what they need to do for 2025.

00;06;30;23 – 00;07;03;13
Scott Stiles
Yeah. I mean, I mean, margins are going to continue to be tight. We haven’t seen any, dramatic shifts really in input costs. We’ve seen a few, a few inputs come down. I think that, you know, we may see some softness in some of the chemicals, but seed cost, looking to be flat. Nitrogen and phosphate prices really haven’t made any, any big changes for over the past year.

00;07;03;13 – 00;07;33;12
Scott Stiles
They’re kind of on par with where they were a year ago. We’ve seen potash prices come down as probably probably be one that we’ve seen some, you know, pretty significant decline from last year. But, lately, I mean, diesel prices have made a run higher. If you notice, crude oil’s back above $80 a barrel and, so diesel prices, you know, they really hadn’t, you know, they hadn’t softened any.

00;07;33;12 – 00;08;02;01
Scott Stiles
They file a crude crude higher. So, I, I guess, you know, in an overall sense, you know, the input prices are fairly flat. You know, compared to what we saw on 24. And, so it’s, you know, that not not any improvement. I guess what I’m getting at there really is that, you know, cost wise, we’re kind of stuck where we where we were in 24.

00;08;02;03 – 00;08;27;01
Riley Smith
Yeah. I’ve, I know on the fertilizer side, you know, because I gather those prices each week. The biggest thing I was seeing is, is that the supply chain was having issues. Either receiving fertilizer because the Mississippi was so low for, for several weeks, getting it up from Nola. And then it was if they had it, it kind of stayed the same price.

00;08;27;01 – 00;08;53;03
Riley Smith
And they’re starting to gather that fertilizer kind of getting ready for planting season. Believe it or not, it’s right around the corner. And that’s hard to believe. Won’t be long. It’ll be March from everybody, South Arkansas and some central from start planting corn as the ground right. Yeah, but yeah, I’ve seen the input price on as far as on the, on the fertilizer side being the same as well.

00;08;53;04 – 00;09;21;23
Riley Smith
So it’s, definitely. And I don’t know if there would be much change as far as, you know, crop prices received, the input, prices paid. But, hoping to see that, this following year, we can possibly get a lower, lower input price on diesel and as well as fertilizer chemical as well. So, but, moving on.

00;09;21;25 – 00;09;31;27
Riley Smith
Is there anything else that you can see as far as individually, individual commodity wise that you need to point out for state?

00;09;32;00 – 00;10;10;15
Scott Stiles
The, you know, I would mention that, you know, from the supply demand numbers that we saw, last Friday, I’d say that, you know, the fundamental picture improved somewhat for for both corn and soybeans. The USDA, I think really, really surprised the, the analyst at least. Anyway, I think the growers Kathe got, I had to sense that, that the yields may be a little bit lighter than, than what USDA had forecast back in November, but, USDA really trimmed the crops.

00;10;10;15 – 00;10;38;21
Scott Stiles
As for corn and soybeans in the January report, to get the the US cornmeal 3.8 bushels and they dropped the soybean yield one bushel and the the take home really from that is how much it tightened up the stocks. The ending stocks for both of those. So now, you know with a lower production in corn, you got to carry out just over 1.5 billion bushels.

00;10;38;23 – 00;11;10;29
Scott Stiles
So it’s at 1.54. So the impressive thing about that is that now we we see a tighter stock situation in corn than we had a year ago. You go back to the 23 balance sheet. Stocks were at 1.76. Today we sit at 1.5. So you see a tighter a tightening of stocks which you know that should point to better average prices for the in the 24/25 marketing year.

00;11;11;01 – 00;11;54;10
Scott Stiles
Same thing in soybeans. So the one bushel yield reduction lowered. The crops size 95 million bushels. And now we have a stocks, projected stocks and beans at 380 million bushels compared to if you go back, if you look at the outlook for stocks in mid year, June, July time frame, we were looking at stocks being really heavy, 550 to 560 million bushels and really kind of put us back at a the stocks at a level where we were five years ago.

00;11;54;12 – 00;12;30;12
Scott Stiles
So 2019 time frame and prices were really weak. We saw futures even dip had an eight, you know, eight in front of them at times. And so with the lower yields, the tighter stocks, in beans that really improved the outlook and bean futures turned about $0.50 higher. In the two sessions, you know, there’s about $0.25 higher on report day and followed through with about another $0.25 higher.

00;12;30;14 – 00;13;00;23
Scott Stiles
Monday. And so the market really responded favorably to the adjustments USDA made in January. And, just, you know, the the bean stocks are now really, you know, on par with last year, where 380 is where they projected for 24 compared to 342 a year ago. So that helped a lot. You know, the markets really like that.

00;13;00;25 – 00;13;32;17
Scott Stiles
And now that really, changed, I think, the fundamental landscape for both corn and beans quite a bit. The thing we continue to watch, and especially in soybeans is, you know, they still got a record crop projected for Brazil. They didn’t change their estimate, of crop size or production in January. It’s still a record 169 million tons.

00;13;33;21 – 00;14;09;26
Scott Stiles
So that’s, you know, of course, is just, you know, a tidal wave, soybeans that will hit the market, hit the export pipeline by the end of the month. From there. And that could really slow our exports down. The other thing is, you know, of course, we’ve been talking about a while and, you know, the trade, what’s the trade outlook and what, things are going to look like, trade wise between the US and China and something that really two concerns, I guess I would point out on, on, on that will impact soybeans the most.

00;14;09;26 – 00;14;12;16
Scott Stiles
I think. Right.

00;14;12;18 – 00;14;34;10
Riley Smith
Right. Yeah. Well, Mr. Scott, you have, anything else? I know it’s the same. So pretty short podcast, but we’ve a much talked about the WASDE and, the stats a lot. It seems like I think we’ve had, what, three podcasts, four podcast on the WASDE now?

00;14;34;12 – 00;15;03;17
Scott Stiles
Think So Want Hey, one before we go. Mentioned one one comment on rice. Rice and cotton real. Just real quick. They did increase the rise. Production. I’ll say. We talked about the record yields earlier. There were a number of states that had record rice yields. Arkansas was one of those, Texas, Missouri, Mississippi also had record rice yields.

00;15;03;17 – 00;15;41;22
Scott Stiles
So USDA did come in and, increase the rice production, 5.2 million cwt. I don’t know what this is. The long grain balance sheet. And, and then also they increased the it as an offset to the larger crop. They did increase the domestic use, 6 million cwt. And it’s believed in the industry, they, you know, that that large increase in domestic use is due to the, to the poor milling quality of this year’s crop.

00;15;41;22 – 00;16;11;04
Scott Stiles
So, so it’s now I guess the net change was a, you know, 800,000 cwt reduction in stocks. It took your stocks down to 30.3 million. You know, that’s a move in the right direction. But the stocks are up quite a bit from last year. You go to the 23 balance sheet. The stocks were sitting at 19.3.

00;16;11;06 – 00;16;53;26
Scott Stiles
So it’s a you know it’s a pretty substantial increase year over year in stocks with you know, given them given the, the large crop size this year. So that’s a, that’s a big overhang on the rice market project. And, average price for the 24 crop. 14.30. It’s about 6.44 a bushel. And, so anyway, just heavy stocks there, 30 30.3, million cwt that just looking back, that is the largest stocks that we’ve seen in long grain since 2018.

00;16;53;26 – 00;17;28;08
Scott Stiles
So pretty, you know, pretty significant overhang on the markets. The other thing I’d, I’d mention quickly be the cotton, they did increase, the US average yield 44 pounds. And that took the, production up on cotton, just about 160,000 bales. Exports continue to be, you know, a problem for cotton. With the, you know, more competition from Brazil and Australia will have a lot to export.

00;17;28;08 – 00;18;13;17
Scott Stiles
So they took took U.S exports down 300,000 bales and increased carry over 400,000 bales to 4.8 million. So, so fundamentally speaking, you know, the balance sheets are really heavy, for a ending stock standpoint on rice and cotton and, so not a markets really didn’t, didn’t respond higher in either, you know, rice or cotton in any, you know, when you compare it to corn and soybeans, you know, cotton rice prices stayed, you know, market reactions pretty subdued for those two.

00;18;13;19 – 00;18;23;06
Riley Smith
Well, the think, the way those ending stocks were, that that’ll affect the 2025 pricing, market pricing.

00;18;23;08 – 00;18;56;29
Scott Stiles
Yeah. You know, and I think it that becomes part of the acreage discussion is, is, you know, if there’s a limited, really limited upside in, particularly in cotton, you know, we’ll see, you know, prices languish or, you know, close to $0.70 or upper 60s, you know, where the where these stocks levels and, that may that may shifts the makers that it may now you’ve got some strength in corn and soybeans.

00;18;57;13 – 00;19;13;23
Scott Stiles
That may the strength there may pull some makers away from cotton. And uh some growers are considering that, I think, yeah, you got to say that price upside cotton is really limited today. Same thing in rice.

00;19;13;26 – 00;19;15;16
Riley Smith
I think market, I think,

00;19;15;17 – 00;19;15;22
Scott Stiles
Yeah.

00;19;15;23 – 00;19;35;01
Riley Smith
Sorry, but, when you think about the state of Arkansas, I feel like there’s been a burst of cotton in the last. I’m going to extend it a little bit and say the last ten years. For the longest time. And in my lifetime, I didn’t see a whole lot of cotton around, especially in our location.

00;19;35;01 – 00;20;06;19
Riley Smith
Of course, you know, a lot of it stays in the southeast and up side of the river, but, central Arkansas started growing a lot more cotton in the last 6 or 7 years. And, and, definitely. Would that be part of this, would you? I don’t know, I’m not trying to walk you out on a limb here and say a cycle, but, with those production numbers and production of acres increasing steadily over time, and now the market prices start to climb back down again on on cotton.

00;20;06;21 – 00;20;08;01
Scott Stiles
Yeah, yeah.

00;20;08;03 – 00;20;18;00
Riley Smith
And other crops go back into, you know, pull, pull that production, acreage back into, corn or soybeans or even rice.

00;20;18;03 – 00;20;56;02
Scott Stiles
Yeah, we’re kind of in a cycle, at least in Arkansas, where we, maybe go up to 650,000, maybe on the top end the last, like you said, the last several years. We’ll we’ll cycle back and forth. We’ll go up to 650,000 or so one year and then pull back to 480 to 500,000 the next year on, on, you know, market signals and that and that may be what we’re what will see in 25 as we, we were up to 650,000 acres planted in Arkansas this year.

00;20;56;02 – 00;21;24;09
Scott Stiles
And we may, you know, depending on how far this rally goes and soybeans and corn, we may see cotton acres pull back. The only caveat with that is that, you know, we had just phenomenal yields. And with cotton and that that always sticks and and growers minds is it you know I we had man we really squeezed a lot out of the genetics that we have in Cotton’s managed right and in the right conditions.

00;21;24;09 – 00;21;52;16
Scott Stiles
We can really you know we can really get some great yields out of it. They may be the thing that that, keeps the acres fairly steady. But, I don’t know. It’s a, it’s a lot of moving parts. We’ve talked about input costs being flat. Price outlook is not that great. You know, at least for cotton and rice.

00;21;52;19 – 00;21;53;19
Riley Smith
Right. And and it,

00;21;53;19 – 00;21;57;02
Scott Stiles
you know, price upside looks pretty limited for those two.

00;21;57;04 – 00;22;09;12
Riley Smith
And, you know, and like you say, corn and soybeans, those what the stocks tightening up in the ending Stocks and the production hopefully or the I would say.

00;22;09;12 – 00;22;10;28
Riley Smith
That the

00;22;11;01 – 00;22;30;08
Riley Smith
There would be probably an increased acreage, in production this 20, 25 year, just basing on the assumption. But what the ending stocks, being the way they are and hopefully the market will push in the right direction and farmers can, make a little money this year.

00;22;30;11 – 00;22;37;29
Scott Stiles
I hope so, again, the, I don’t know, it’s,

00;22;38;01 – 00;22;51;10
Riley Smith
They I feel like it’s been the same story for the last two years. Yeah. From 2023 to now, it’s like, man, we’ve been in this in this, in this ballot for for a while. It’s time to change. Change scripts.

00;22;51;12 – 00;23;19;27
Scott Stiles
Yeah. Thats true, thats true. But, there’s a lot, a lot we don’t know. We’ll we’ll be smarter, I guess, after, you know, in, in another week or so, we’ll, we’ll get more insight on, on, biofuel policy, trade policy, things like that from the new administration, things that, you know, we are wondering about. That could, you know, that could dictate the direction of, of prices.

00;23;20;00 – 00;23;49;13
Scott Stiles
We got some weather concerns in parts of South America, Argentina, and some, you know, some of the neighboring countries, southern part of Brazil, have seen some dryness. So, as it’ll continue to be something else to watch over the coming month as, as, you know, how the how the South American crop finishes. So again, as always, I mean, we’ve got plenty to watch,

00;23;49;16 – 00;23;51;00
Riley Smith
Right

00;23;51;02 – 00;23;57;19
Riley Smith
Mr. Scott, do you have, I think we’ve covered about all of it, haven’t we?

00;23;57;22 – 00;23;59;13
Scott Stiles
There was a lot I know that.

00;23;59;16 – 00;24;29;13
Riley Smith
Well, we touched, you definitely showed, good highlights for. For what? Positive. And, and and the and the back side of it, too, as well as, you know, the information that we were sad to hear, but it’s the truth. And the producers our growers, and the public needs to know what’s going on. I think a lot of producers now are starting to carry really, really starting to sharpen their pencil and and watch each

00;24;29;13 – 00;24;45;09
Riley Smith
Penny. But with that. I appreciate you joining on today. Giving us update on the WASDE report. Once again, hopefully the next time we talk about it WASDE it’ll be for the 2025.

00;24;45;12 – 00;24;48;25
Scott Stiles
Okay. Sounds good. Enjoyed visiting with you.

00;24;48;28 – 00;25;14;21
Riley Smith
Yes, sir. Well, everybody stay tuned for market report. Thanks. All right, guys, back with you. Market report March 25 Corn current price is at $4.79 per bushel. A month agos price is at $4.45 per bushel. That’s up $0.34 a year ago price was at $4.44 per bushel that’s up $0.35. March 25 Rice current price is at $14.83 per cwt. Month

00;25;14;21 – 00;25;46;07
Riley Smith
agos price was at $14.95 per cwt. That’s down $0.12. Year agos price was at $17.56 per cwt. That’s down $2.73. March 25 Soybeans current price is at $10.43 per bushel. A month agos price was at $9.82 per bushel. That’s up $0.61 a year agos price was at $12.27 per bushel. That’s down $1.84. July 25 Wheat current price is at $5.69 per bushel. Month

00;25;46;07 – 00;26;10;03
Riley Smith
agos price was at $5.68 per bushel. That’s up $0.01. A year agos price was at $6.05 per bushel. That’s down $0.36. March 25 Cotton current prices at $0.68 per pound. A month agos price is at $0.69 per pound. That’s down $0.01 a year agos price was at $0.81 per pound. That’s down $0.14 weekly U.S. average for peanuts. Current price is at $470 per ton.

00;26;10;03 – 00;26;37;18
Riley Smith
A month ago, gas prices at $480 per ton. That’s down $10, a year agos at $560 per ton. That’s down $90. And that’s your commodity futures this week. You’re weekly input prices. This week, fertilizer Urea is at $492.50 per ton, ammonium nitrate at $505 per ton, ammonium sulfates at $520 per ton. DAPs at $767.50 per ton.

00;26;37;20 – 00;27;08;07
Riley Smith
Triple Super phosphates at $643.50 per ton. Potash is at $453 per ton. And your pellet lime this week is $233.33 per ton. Your diesel prices this week. Off road diesel is at $2.91 per gallon. Highway diesel is at $3.23 per gallon. And your Mississippi River level at Memphis, Tennessee this week. Your current levels at 5.58ft a year ago was at 14.87ft.

00;27;08;14 – 00;27;19;13
Riley Smith
Want to thank you all again for joining in on another episode of Morning Coffee and AG Markets. We hope you enjoyed it. We hope you have a great rest of your workweek. And thanks again for listening. Until next time, we’ll catch you on Flip flop.

00;27;19;19 – 00;27;20;04
Riley Smith
Bye bye now.