Ep. 44 – USDA’s May WASDE Report Provides Initial Outlook for 2025 Crop Prices

00;00;08;05 – 00;00;36;01
Dr. Hunter Biram
All right, well, good morning, good morning, everyone out there. I am not your typical host of morning coffee and ag markets, I am Hunter Biram. And yet again, I’ll be, I will be the consolation prize for the week. I think Riley will be joining us again next week. But for the time being today I have got Mr. doctor professor Scott Stiles in the studio, so to speak, in the virtual studio with us today.

00;00;36;01 – 00;00;37;10
Dr. Hunter Biram
Scott, how are you doing?

00;00;37;12 – 00;00;40;22
Scott Stiles
I’m doing great, and I appreciate the honorary doctorate.

00;00;40;22 – 00;00;52;07
Dr. Hunter Biram
You deserve it. I’m telling you, I’m already thinking about ways to get that done. Because I’m telling you, you are. You are a whiz, and we rely on you for so much. And Scott, we just greatly appreciate all the great work that you’re doing.

00;00;52;09 – 00;01;00;04
Scott Stiles
I’m really enjoying working with you and Ryan and Riley, and I’m… really appreciate the opportunity. Thank you.

00;01;00;06 – 00;01;24;19
Dr. Hunter Biram
Of course. Well, today, everyone, we’re going to be talking about the May 2025 WASDE from USDA that was released on Monday at 11 central time. And, what’s interesting about the May WASDE is that it gives us our first look at the 25-26 marketing year. So, looking, or thinking about that 25 crop. Of course, we’ve had the prospective plantings in March.

00;01;24;21 – 00;01;35;04
Dr. Hunter Biram
But now we’re getting a look at some prices. And so, Scott, with that, I’m going to head over to you. What are some things that you think are interesting in this May 2025 WASDE report.

00;01;35;06 – 00;02;14;21
Scott Stiles
Well, I think the most exciting aspect of the, the report was what happened in the with the bean balance sheet for the new crop year. There were a wide range of, free report estimates on where the, the ending stocks could, could fall. So the range of guesses was, 400 million bushels at least. And, at the, at the bottom end, some people thought the stocks could be as tight as $267 million. At the top end, was kind of a worst case scenario,

00;02;14;22 – 00;02;50;00
Scott Stiles
Hunter, where the stocks could be at $675 million. So we were I think the fear was, is that if USDA says, okay, well, we have to assess the trade, our trade relationship with China as it is today, with the steep tariffs, and we could be faced with a, a trade environment with them, similar to what we saw in 2018 and 2019, where U.S. bean exports dropped 20%.

00;02;50;02 – 00;03;23;27
Scott Stiles
And if that was the, you know, the approach USDA took, then you could see, you know, a really burdensome bean stocks number, that reflected just, a massive drop in exports. But, we had I think the dialog was really good last weekend with the, with the Chinese delegation. And, and so USDA decided to, you know, take a very conservative approach and, and exports, and they reduced the exports some.

00;03;23;29 – 00;03;48;15
Scott Stiles
But very little, year to year. And so that left us with a, a really constructive stocks number for beans that came in at $295 million. So, that was really a boost to the bean market, and I think really the bright spot of the report. So since the, report numbers were released, beans are up $0.30 to $0.35.

00;03;48;15 – 00;04;14;18
Scott Stiles
So if you’re looking, you know, for the good news in the report, I think we, we call it a break in the numbers that we saw for soybeans. So, and, you know, the price outlook is a little better, in upcoming year, you know, in the 24 marketing year, the season average price is at $9.95. For the upcoming year,

00;04;14;21 – 00;04;45;26
Scott Stiles
it’s a little better, at $10.25, but the market trades and looking, you know, November futures are trading at $10.60 right now. So, and it’s, you know, a solid trend, you know, up, you know, we may we may test some resistance. It’s not far away, you know, at $10.75. And, it could be, you know, it could be an opportunity to look at, to do some, you know, to do some pricing for the 25 crop.

00;04;45;29 – 00;05;02;07
Dr. Hunter Biram
Yeah. So, in the futures market, it sounds like a kind of a high number. But what about basis? Have you looked at any local basis here lately? Scott, I know that every week that we release that. But what is, basis looking like for a, for a harvest time delivery window for soybeans?

00;05;02;10 – 00;05;30;15
Scott Stiles
Right. So the the Mississippi, on the Mississippi River, you know, the basis right now, maybe, maybe ten under, you know, ten under for, for new crop on the, on the river, you know. At local elevators, that would probably be a lot less than that. So looking at fall delivery, basis on the Mississippi River, eight under the board.

00;05;30;18 – 00;05;34;08
Scott Stiles
So that would, you know, put bids right at $10.50.

00;05;34;08 – 00;05;35;13
Dr. Hunter Biram
That’s awesome.

00;05;35;15 – 00;05;37;21
Scott Stiles
Yeah. So not, not bad.

00;05;37;23 – 00;05;51;21
Dr. Hunter Biram
Well, I say that’s awesome, it’s relatively awesome, you know. Like, it’s better than what, you know, what we’ve been seeing. And, so with that, Scott, I mean, what are some things that we should be, that farmer’s should be thinking about, seeing prices like that?

00;05;51;23 – 00;06;10;08
Scott Stiles
Well, you know, maybe that’s a favorable, basis to lock in. You know, we’re in you, you’ve written a lot about the challenges with the river navigation and, and, the repeat, three-peat, or just some of the…

00;06;10;08 – 00;06;15;12
Dr. Hunter Biram
The repeat that we don’t want. Yeah, hopefully, and hopefully no four-peat, my goodness.

00;06;15;15 – 00;06;45;04
Scott Stiles
Yeah. So if you get into, you know, a situation like that, then, you know, normally we see a basis collapse. So, so eight under you know eight under the board looks favorable enough, almost to the point where, hey, you know, I may, may lock that in and, and, and watch the futures market a little more, you know, lock in when the basis contract and then just continue to watch the futures some as we go through the growing season.

00;06;45;07 – 00;07;01;19
Dr. Hunter Biram
So, Scott, now this is something that, you know, I’m not sure if you want to go into this territory. I know that we’re getting deep into marketing, but, I’m just curious, what are, what’s the upside, you know, the pros and cons of locking in basis versus locking in that cash price?

00;07;01;21 – 00;07;47;02
Scott Stiles
Well, I mean, right now the, you know, the we’ve got a whole growing season in front of us. And I think that, you know, we’ve seen a trend change in the market with the prospect of, you know, a $295 million carryout, which is, you know, tighter than last year. The other thing that you mentioned earlier was the, you know, the, the prospective plantings and, and the methodology that USDA uses to come up with production, besides the prospective plantings, they use a, you know, a trend yield and, the yield they use for the 25 crop was 52.5 bushels.

00;07;47;13 – 00;08;06;15
Scott Stiles
Which is not just a trend. I mean, it’s a trend yield and record yield. So, I think it’ll be a challenge. And some, you know, especially the west side of the Corn Belt at this point just to say, hey, we’re going to have a record crop. It is off to an early start.

00;08;06;15 – 00;08;30;18
Scott Stiles
It’s off to a good start in terms of the planting pace. And that’s always a plus to get an early start planting, but we’ve got this full growing season ahead, a lot of weather, a lot of weather to trade yet. Normally we hadn’t seen the seasonal hazards we were talking about earlier. You know, we’ve you know, we could see if weather’s great,

00;08;30;21 – 00;08;39;16
Scott Stiles
you know, we may see the seasonal high, maybe a month from now normal.ly And by mid June we may be seeing seasonal highs in the market.

00;08;39;18 – 00;08;50;29
Dr. Hunter Biram
And so whenever we see those seasonal, the seasonal highs, let’s say that we’re sitting at June 15th. Is that going to be a good time to then lock in the price versus lock in basis, or maybe just a game time decision?

00;08;51;01 – 00;09;17;02
Scott Stiles
You know, eight years out of ten, you know, we need to have I’d put it in a range of have 50 to 60% on the crop priced, by mid June. Yeah. You know, may be a good rule of thumb to follow, but it will be important to just see how, you know, see what the trends are and the weather, and see what the outlook is at that point.

00;09;17;02 – 00;09;33;24
Scott Stiles
If it, if, the crop conditions are really strong and, we’ve got, you know, repeated rains in the, in the outlook, we probably do want to have the majority of both the corn and soybean crop marketed by mid-June.

00;09;33;26 – 00;09;45;26
Dr. Hunter Biram
Yeah. That’s super important. And I know that, that a lot of folks that I talk to about forward contracting, their big concern is non-delivery. So I mean, what is your response to that typically?

00;09;45;29 – 00;10;04;29
Scott Stiles
Well, you know, that’s kind of where we, you know, you you don’t want to be too aggressive in forward contracting. So that’s where you, you know, that’s why I would say maybe 60% maybe as far as we want to go and allow, you know, some room for, you know, the weather to have an impact on your own crop yields.

00;10;05;00 – 00;10;20;20
Scott Stiles
And let’s just not, you know, be overly aggressive. And maybe 60% is a good number to, to stop off at, at forward contracting, so we don’t overcommit. And in that sense and, leave some room for the weather to possibly impact the yield.

00;10;20;26 – 00;10;24;13
Dr. Hunter Biram
Yeah. Corn, what are some things that you want to highlight from corn?

00;10;24;15 – 00;11;06;16
Scott Stiles
Okay. Well, USDA printed an ending stocks number for new crop at $1.8 billion, which was at the low end of the pre report guesses, the range was $1.8 billion up to $2.26. So we came in at the low end of the range. Again it’s, it’s the, the used the, you know, the March prospective acres which are, you know, up 4.7 million from, from last year and, and again, a trend yield of 181, which would also be a record.

00;11;06;16 – 00;11;37;17
Scott Stiles
So, similar to beans, you know, we’re off to a great start. We got 62% of the crop planted and, you know, running just slightly ahead of the average pace. So, in that regard, you know, strong potential in that, in that sense. But, it is generally tough to, to reach a record yield when you expand acres that much.

00;11;37;19 – 00;11;59;25
Scott Stiles
You’re going to have some acres in the Midwest that are corn on corn. We have a lot of what you would call fringe acres, where you had acres outside of the corn belt that were added. So when you see a, you know, when we have a big step up in acres, it’s you usually don’t reach the record yield.

00;11;59;25 – 00;12;25;10
Scott Stiles
So it’s a lot of uncertainty in that sense. And, and maybe some potential for the crowd to be a little smaller. But they did project a record corn crop – 15.82 billion bushels. So it’s a it’s a huge crop, record crop. You know, based on a lot of unknowns. The acres are probably there. The yield. That’s the big question mark.

00;12;25;13 – 00;12;57;07
Scott Stiles
I think. But, with the with the bigger carryout at 1.8, USDA is looking for, lower average farm price, $4.20 average farm price for the 25 crop compared to $4.35 for for the 24 crop, which makes sense. With the, projected carryout coming up, some 385 million bushels, so.

00;12;57;12 – 00;13;16;24
Dr. Hunter Biram
Well, so not as, not as encouraging as soybeans. No. No more, at, you know, price coming down from $4.35 to $4.20. I mean, you know, in the winter meeting, Scott, you know, one story that we were telling and that we saw on the data was that, you know, the fundamentals for, if I remember right, the fundamentals for corn just looked better.

00;13;16;24 – 00;13;30;18
Dr. Hunter Biram
And the returns for corn just look better than for, soybeans. So have you had a chance to see what that, what those updated returns might look like with these current prices?

00;13;30;20 – 00;13;55;24
Scott Stiles
Well, you know, I think the, you know, the Midwestern growers, I, I think that, you know, they, they sell exactly what you’re talking about. You know, the price ratios were telling them, you know, they were at historically low levels around that 2.2 mark that we’ve, mentioned in, in the winter meetings that, you know, that corn prices relative to beans made corn

00;13;55;24 – 00;14;06;22
Scott Stiles
look like, you know, the economics favored corn and, you know, mission accomplished. The market, you know, brought the acreage in… And, so we’re looking at it.

00;14;06;22 – 00;14;08;03
Dr. Hunter Biram
Unfortunately, right?

00;14;08;06 – 00;14;41;08
Scott Stiles
Yeah. Unfortunately. And, and, so, I think that that puts the, you know, pressure on the grower, to, to market this crop, early, you know, if we, I think if, if, you know, weather continues to be favorable, then, as we talked about sometime over the next 30 days, we have to make some marketing decisions on the corn crop, because, well, prices could really, dive.

00;14;41;10 – 00;15;10;05
Scott Stiles
You know, when you when you look at a $4.20 average. Well, that’s an average. There’s going to be some cash prices below that, that could be, you know, we, we could, we could have cash prices from $4.20 down to, to, to $3.85 or $3.90 by, harvest time. And, so we do need to make some, I think look seriously at making some marketing decisions over the upcoming month.

00;15;10;07 – 00;15;17;07
Scott Stiles
But a lot of, weather will had to be perfect, to get to this record yield that the USDA has printed.

00;15;17;07 – 00;15;33;23
Dr. Hunter Biram
So well and and something else, Scott, you know, back to the Mississippi River. I mean, the first year that we had the low river levels, the corn basis didn’t really seem to be impacted all that much, at least since I was looking at it. But in years two and three, corn basis was not safe from that. So I think, you know, back to your point.

00;15;33;23 – 00;15;42;15
Dr. Hunter Biram
You know, we could see, you know, independent of the river. I mean, the $3.80, the $3.90, but with the river it can get even lower than that. You think?

00;15;42;17 – 00;16;06;05
Scott Stiles
Yeah. Yeah. So we were talking about the new crop bean basis being eight under. Well the new crop corn basis is ten under. So so there again it’s you know, it’s not a, you know, no, not a, a terrible level to, to think about locking in. So…

00;16;06;08 – 00;16;10;27
Dr. Hunter Biram
And then and then the $4.20 price, I mean, we’re getting into PLC trigger range, right?

00;16;11;00 – 00;16;38;14
Scott Stiles
That’s true. So that would, you know, if if we do have an average of $4.20, that would, that would net a PLC of $0.06 a bushel. So, so looking at futures, you know, it’s September futures that we, we price a lot of corn off of, is at $4.27 this morning. So, not very far from USDA’s price outlook.

00;16;38;16 – 00;17;11;00
Scott Stiles
Yeah. No, the report was not favorable. You know, I mean it wasn’t price supportive to corn and, you know, it’s it hadn’t moved a lot, you know, in the last few days, but it just it’s, you know, we’re faced with a 1.8 billion carry out. It hadn’t been, hadn’t been price supportive. So we’re sitting and finding good support around $4.25 right now for the for the Sep. contract.

00;17;11;03 – 00;17;16;20
Dr. Hunter Biram
So, what about rice and cotton? Let’s move over into, more of our traditional southern crops.

00;17;16;23 – 00;17;58;01
Scott Stiles
Okay. Well, rice, similar to corn, it’s faced with a, you know, another year of heavy carry out, you know, the outlook is for lower production and I think that, you know, most in the industry would say today that that, you know, that using the March perspective, planting acres is probably a stretch given all the challenges that we had in April with the flooding and, in parts of the state, with rice prices continuing to trend lower.

00;17;58;03 – 00;18;39;14
Scott Stiles
And, you know, we’ve talked about the spike in urea prices lately, things like that. You know, a combination of things. Can I enter into the growers decision about, do I want to plant these last acres of rice? And I think that, you know, when we get out to June 30th and see the acreage report, we’ll probably see a lower rice acreage number than, than the perspective planning. Which may, you know, we may see a lift in the rice market later, but right now it’s just really burdened, with, with a huge carryout.

00;18;39;16 – 00;18;41;10
Dr. Hunter Biram
And that’s both long and medium grain?

00;18;41;13 – 00;19;06;22
Scott Stiles
Yeah, long grain, the 24 crop, the carry out was 35 and 3, I think that was a 14 year high in stocks. And the first print for ending stocks, for the 25 crop, USDA came up with 37.5 million hundredweight. So that would be the highest ending stock since 1985.

00;19;06;23 – 00;19;11;06
Dr. Hunter Biram
Oh my goodness. Yeah, 40 years, 40 years.

00;19;11;06 – 00;19;52;11
Scott Stiles
And, so, you know, the outlook is for lower production, but you just had this massive carry in, of the 35 3 and then add to that another year record imports at 43 million. You know, it just keeps, you know, keeps the, the total supplies pretty, you know, I mean, record large for long grain and, demand remains pretty strong, but it’s just not an offset to, to the, to the record large supplies that we’ve got in long grain.

00;19;52;11 – 00;20;20;27
Scott Stiles
So, so that puts a lot of pressure on price. USDA is looking at, 12, $12 100 weight or $5.40 a bushel, which gets us back to that PLC discussion a minute ago. The reference, you know, the reference price for a long grain is $6.30 a bushel, also at $5.40. We’re looking at a $0.90 a bushel PLC payment.

00;20;20;29 – 00;20;22;20
Scott Stiles
Wow. Yeah.

00;20;22;22 – 00;20;27;21
Dr. Hunter Biram
That’s a big one. Historically, how does that compare? $0.90 per bushel.

00;20;27;23 – 00;20;59;15
Scott Stiles
It’s been a few years since we’ve been at PLC level. You know, we’ve had an average price of $6.39 last year and 23, we had an average price at $7.16. So, it’s been… I mean, I’d have to, let me see if I can flip back to my notes here, see when we, when was the last time? 2021 was the last time we had a PLC payment for long grain and medium, southern medium grain.

00;20;59;17 – 00;21;01;20
Dr. Hunter Biram
Wow. It’s been a few years.

00;21;01;23 – 00;21;03;22
Scott Stiles
Yeah.

00;21;03;25 – 00;21;11;12
Dr. Hunter Biram
So, then we’ll, top it off here. We’re, in it here with cotton. What are you seeing on cotton? Nothing too exciting, looks like.

00;21;11;12 – 00;21;45;01
Scott Stiles
No, no, it’s same, kind of the same story as with rice. It’s, heavy stocks. USDA come up with a, 5.2 million, carryout for the new crop year. Here’s a surprising thing, in all of this, is that acres, planted acres, are supposed to be down 1.3 million from last year. But with cotton, it’s always it’s not what you plant, it’s what you harvest.

00;21;45;04 – 00;22;17;18
Scott Stiles
And so the with the recent rains that that we’ve seen in the, in the southwest region, which Texas, Oklahoma, Kansas, that, that area, it’s got some decent rainfall over the past month. So the USDA thinks we’re going to abandon fewer acres. And so, actually, we’re going… planted acres will be down 1.3 million, but harvested acres will be up 500, be up 560,000.

00;22;17;21 – 00;22;25;14
Scott Stiles
from last year. So a little bit larger crop is in the cards for, for 25.

00;22;25;16 – 00;22;41;21
Dr. Hunter Biram
That, you know, Scott, that that was one thing that I noticed, you know, with this production at 14.5 million bales for 25-26 and then, you know, seeing that’s a little bit above the 14.41 million for 24-25. And yeah, before we got on here, I scratched my head, I was like, man, there’s got to be something here.

00;22;41;21 – 00;22;51;15
Dr. Hunter Biram
But you know, to your point, you know, it’s all about what you harvest, not what you plant. And in recent years, I mean, there’s been some pretty big differences between planted and harvested acres for cotton.

00;22;51;17 – 00;23;15;25
Scott Stiles
Right. So, well see, we abandoned 30% of the crop last in 24 and 37% of the crop in 23. And the outlook for 25 is that abandonment will be down to 15%. So it’s just, you know, it’s driven by, you know, when you think about it, Texas is going to have 50 to 55% of the U.S cotton acreage,

00;23;15;25 – 00;23;37;01
Scott Stiles
so the rainfall that they get there is a key driver of this, and of the lower abandonment. And so far, I mean the moisture, you know, they’ve got good, I’ll say, topsoil moisture. They’ve got enough to, you know, get the crop planted and kicked off. And so, we’ll see how long that lasts. With Texas, you never know.

00;23;37;02 – 00;24;05;20
Scott Stiles
You know, you could have, summer could turn really dry late in the year. You know, July, August could really, you know, the patterns could flip entirely, you never know. But right now, they’re off to a great start, moisture wise. So, a little bit bigger crop, as you mentioned, 14.5 million bales. No change in mill use.

00;24;05;20 – 00;24;35;17
Scott Stiles
It’s still at the historic lows we’ve talked about at 1.7 million bales of domestic use, its lowest since the 1880s. And USDA is looking for a little improvement in exports up to 12.5 million bales. So that’s up from 11 and 1 in the 24 crop. So, that’s encouraging. But, anyway, the stocks are still heavy.

00;24;35;17 – 00;25;02;06
Scott Stiles
I think, I’m trying to think out how a six year high is, is where we’re at on stocks at 5.2 million. So, not an optimistic price outlook at $0.62. And that keeps us, you know, the prospect of PLC for cotton, is certainly real for the 25 crop.

00;25;02;08 – 00;25;18;07
Dr. Hunter Biram
Yeah. And I just pulled up the, drought monitor, the current drought monitor. And just taking a look there. You had mentioned Texas. It’s looking like, you know, that western part of Texas, there’s some pretty significant areas of drought. So, you know. Who knows what abandonment might look like.

00;25;18;09 – 00;25;38;23
Scott Stiles
Yeah, you never know. Yeah, the bulk of the cotton’s kinda, yeah, you know, from Lubbock, kind of, you know, a little south of there, some of those areas that are, you know, on the most severe droughts are a little too far south for cotton if you, you know, and as you get closer to the Mexico border.

00;25;38;23 – 00;25;43;16
Scott Stiles
But the high plains region, that’s a really significant cotton area.

00;25;43;19 – 00;25;50;09
Dr. Hunter Biram
Yeah. Well, good deal. Well, Scott, any other thoughts before we sign off here?

00;25;50;11 – 00;26;21;19
Scott Stiles
You know, I would have a just remind, you know, people again, just to, you know, especially if you got corn and soybeans, pay attention to the weather outlook in the Midwest. The planting is off to a great start, off to a solid start. And, so, when you look at normal seasonal tendencies, typically we’re seeing price peaks in mid-June for corn and soybeans, and so make some marketing decisions based on seasonal tendency.

00;26;21;22 – 00;26;50;23
Scott Stiles
And, you know, keep an eye on, stay in tune with weather outlooks, for the Midwest, kind of see, are they going into a dry pattern, or is it going to be, you know, are they going to continue to get sufficient, moisture to sustain the crop? Those are things to pay attention to as, you know, look, in the region of the country that’s producing the bulk of the crops and, and, those would be the market drivers going forward.

00;26;50;26 – 00;27;12;25
Dr. Hunter Biram
Well, great. Well, Scott, I appreciate your analysis on this and your insight, as always. And, folks, with that, stay tuned for the market report. Thank you all. Alright folks, here with your market report September 2025 corn, current price $4.27. And by the way, these prices are as of May the 14th, 2025. Corn, $4.27,

00;27;12;25 – 00;27;41;01
Dr. Hunter Biram
that’s up $0.28 from a month ago and down $0.46 from a year ago. September 2025 rice is at $12.86 per 100 weight, down $0.89 from a month ago, down $2.61 from a year ago. November 2025 soybeans, are at $10.61 per bushel. That’s up $0.32 from a month ago and down $1.40 from a year ago.

00;27;41;04 – 00;28;10;24
Dr. Hunter Biram
December 2025 cotton coming in at $0.68 per pound, and then some change, that’s going to be down a little over a cent from a month ago. And that’s going to be down a little over $0.06, $0.06 from a year ago. July 2025 wheat is at $5.25 per bushel. That is down $0.37 from a month ago and down $1.41 a bushel from a year ago.

00;28;10;27 – 00;28;33;22
Dr. Hunter Biram
U.S. weekly average peanuts, coming in at $490 per ton. That is down $24 per ton for a month ago and down $24 a ton from a year ago. We do not have our, fertilizer prices, so I’m going to skip to the diesel prices. Off road diesel this week, coming in at around $2.45 per gallon, highway diesel $3.34 per gallon.

00;28;33;24 – 00;29;00;26
Dr. Hunter Biram
The off road diesel price compared to month ago was up $0.15 and compared to three months ago, that is going to be down $0.11. For highway diesel, the $3.34 price, that’s going to be up $0.07 from one month ago and down $0.18 from three months ago, and Mississippi River level reading, again as of May 14th, at 20.82ft.

00;29;00;28 – 00;29;19;18
Dr. Hunter Biram
One month ago, that was 37.15ft, and three months ago that was 12.38ft. So that would mean that the Mississippi River level is about 16ft less than it was a month ago, and is up about eight feet than it was three months ago. With that, thank you for tuning in, and, tune in next time for another episode of Morning Coffee and Ag Markets.

00;29;19;21 – 00;29;20;02
Dr. Hunter Biram
Thanks.