Ep. 23 December 2024 USDA WASDE Report

00;00;10;15 – 00;00;12;06
Scott Stiles
Man, yeah.

00;00;12;08 – 00;00;37;20
Riley Smith
Good morning. Good morning. Welcome to another episode of Morning Coffee and AG Markets with your host, Riley Smith. Today, we’ve got Mr. Scott Stiles on the zoom call with me. I’m currently sitting at home from, what I would deem my home studio, doing it off of my mic. Got some sick folks been around some sick folk and, taking care of them, so decided to just stay home and record this podcast.

00;00;37;22 – 00;00;42;19
Riley Smith
Mr. Scott, we’re going to be talking about the WASDE report that was released yesterday aren’t we?

00;00;42;22 – 00;01;06;21
Scott Stiles
Yep, yep, USDA released their monthly WASDE, yesterday morning. And, though we’d chat about that, today they made a few few key changes and, and, something that, particularly, in, in the corn, corn market, made some, some key changes on the balance sheet there. So.

00;01;06;23 – 00;01;18;14
Riley Smith
Well, we’ll, I guess we’ll just deep dive into it. You can just go ahead and start off, is there anything on the front end that you want to talk about before we start talking about individual commodities?

00;01;18;16 – 00;01;45;00
Scott Stiles
Not really. I mean, we continue to see, you know, the weak commodity prices. But corn is, has been making a, a little run higher, you know, so it’s making its late summer low. And so, we’ll get into that and talk about the balance sheet changes that, there were made yesterday that that made me driving this, this run higher in corn.

00;01;45;02 – 00;01;55;18
Riley Smith
So corn is so with. So I guess we’ll just start with corn. And that’s the one that you’ve seen the most change and thus far from the last WASDE report we talked about a few weeks ago.

00;01;55;20 – 00;02;30;08
Scott Stiles
They did. It’s, yesterday they, lowered the carryover on corn, 200 million bushels, and they lowered it down to, 1.738 billion, which was below the, you know, below anybody’s estimate ahead of ahead of the report. So, the the 200 million bushel drop was, a combination of, a 50 million bushel increase in ethanol use and 150, million bushel increase in exports.

00;02;30;08 – 00;03;05;14
Scott Stiles
So, the the magnitude of the the increase in exports really, really surprised the market. It was it was certainly warranted. But, the fact that they they were so aggressive and and increased it that much was it was a bit of a surprise. But the interesting thing is, is, the carry over now is down, just a little bit below last year and there were, you know, many times, you know, this year we thought, you know, we’re going to be stuck with a 2 billion carryover in corn.

00;03;05;16 – 00;03;36;09
Scott Stiles
And now we’re at just 1.738 billion number, which is just a little bit below last year’s, 176. So it’s encouraging. And, and the market has been, been moving to the upside. The more, in corn we’re trading, you know, March is trading at 450, this morning. But when you look back, we were trading at 405.

00;03;36;12 – 00;03;46;03
Scott Stiles
Back in late August. So, you know, 45 cent rally since, you know, off the off the, also August lows.

00;03;46;06 – 00;03;48;13
Riley Smith
Not great, but it’s a it’s better.

00;03;48;16 – 00;04;13;10
Scott Stiles
It’s better. It’s certainly, certainly move in the right direction. So, but anyway, that was, that was really the, the I guess the news story yesterday was the, the level of changes that they made in the corn balance sheet. A lot of times you think, you know, USDA will, kind of measure these and meter out adjustments in, in the balance sheet.

00;04;13;10 – 00;04;32;17
Scott Stiles
But the 150 increase in exports was really a, a shock. And, but, exports that are the sales are running, you know, 33% ahead of last year. And so some increase was certainly certainly warranted.

00;04;32;19 – 00;04;37;11
Riley Smith
Right. Let’s flip over and talk about the neighbor soybeans for a min.

00;04;37;11 – 00;04;40;11
Scott Stiles
Yep. Yeah. No. Yeah. Go ahead.

00;04;40;13 – 00;04;54;21
Riley Smith
I read your, reading your summary a little bit. Notice that you said there was no, these projections were in change this month. But however, I can say that the global soybean production was increased this month.

00;04;54;24 – 00;05;19;13
Scott Stiles
Yep. Just a little bit. They didn’t like you said they didn’t make any changes to the U.S. balance sheet other than, season average price. They took the season average price down $0.60 a bushel for the for the 24 crop, down to, to 1020. And that was the only the only change they made on the on us balance sheet.

00;05;19;16 – 00;05;44;14
Scott Stiles
But on the world said they increased the Argentinean crop a million, 2 million tons to, to 50, 52. So, that was really the the major change that they made on the on the world balance sheet. You know, we’re watching the size of the Brazilian crop really closely. And, but they, they didn’t make any changes in December.

00;05;44;17 – 00;06;17;22
Scott Stiles
It’s a little early. Really to make any, make any changes with any confidence on the crops as they’re, we may see some adjustments to the Brazilian crops in January or February, but they left it at 169 million tons, which is, a record crop, from Brazil. So, and, you know, planting finally, you know, it got on track there.

00;06;17;22 – 00;06;40;22
Scott Stiles
It started off dry in October, and then they started catching some rains and plant and moved along on schedule. And they’ve continued to catch some rains. So that crop has some, some strong potential. And, and that’s reflected in, in the record, estimate of 169. So it’s, another big crop on the way there.

00;06;40;24 – 00;06;49;18
Riley Smith
Right. And I say that South America soybean production, it was, it’s forecasted to be at record, coming up.

00;06;49;21 – 00;07;22;04
Scott Stiles
Yeah. 2010, another record. When you look at total South American production, that 20, 20 million tons over last year. So, he it’s just, you know, a lot for us to compete with and, and, you know, we’re in we’re in kind of that narrow export window right now, but, but later today into January, you’ll start to see the South American crop getting to the export pipeline.

00;07;22;04 – 00;07;29;08
Scott Stiles
And it looks like an, you know, it looks like they’re not at this point. And the crop looks great and has a lot of potential.

00;07;29;10 – 00;07;34;21
Riley Smith
What do you know when South, Brazil, when their, their harvest period is.

00;07;34;23 – 00;07;51;19
Scott Stiles
Yeah. They’ll start some harvest in January. And by the end of January we’ll start you know, it will be making it to the ports, but but yeah, I’ll know early as beans. They’ll, they’ll start harvest in January. Right.

00;07;51;22 – 00;07;56;00
Riley Smith
All right. I guess we’ll change gears now. We’ll talk about rice a little bit.

00;07;56;02 – 00;08;27;03
Scott Stiles
Yeah. Not not much change there either. But the second month in a row they’ve, lowered the export estimate on the long grain balance sheet to took it down 2 million cwt to 72. They also lowered it to 2 million cwt last month as well. So we’re, RF rice sales to Mexico or down about 19%. When you look at, you know, where it, you know, where we’re lagging in sales compared to last year.

00;08;27;03 – 00;08;56;01
Scott Stiles
So, we’ve got lower reference sales to Mexico. We haven’t sold as much milled rice to Iraq this year as we had a year ago. And, I was looking at, long grain exports overall are down about 8% compared to last year. So, so some, you know, some reduction in exports compared to last year is warranted.

00;08;56;03 – 00;09;25;29
Scott Stiles
So the balance sheets getting a little fatter, for long grain were 31.1 million cwt. But that didn’t USDA left the season average price alone at $14.50 cwt. I think it’s $6.53 bushel. So that was really it on rice is lowered exports. And that was only, only only adjustment they made.

00;09;27;20 – 00;09;37;04
Riley Smith
I gotcha its say this, I see that the average farm prices for 2023 was $15.90. That’s a, pretty big.

00;09;37;06 – 00;09;38;04
Scott Stiles
Yeah.

00;09;38;07 – 00;09;39;00
Riley Smith
Change.

00;09;39;06 – 00;10;21;08
Scott Stiles
Yeah. $7.16 a bushel last year compared to $6.53 this year. So, and, you know, and that’s reflected in, in the heavier stocks last year, you know, we had 19.3 million was the carry out for long grain this year. We know we’re forecast at 31.1 So just a much, you know, a much bigger crop, at 13 million, increase in production, imports of rice are up some, about 1.7 million cwt on imports.

00;10;21;08 – 00;10;40;23
Scott Stiles
So it’s just a, heavier supply. You know, for the for the 24 balance sheet, due to product, you know, more, you know, a little, you know, a little more acres increase in production, increase in imports.

00;10;40;26 – 00;10;44;26
Riley Smith
Good. Well, not so good, actually, but yeah.

00;10;44;26 – 00;10;47;05
Scott Stiles
Yeah, it’s not not good price wise when you.

00;10;47;12 – 00;10;48;12
Riley Smith
Get price wise.

00;10;48;12 – 00;10;50;13
Scott Stiles
And but.

00;10;50;15 – 00;11;01;20
Riley Smith
We’ll talk about we’ll just go ahead and move on and talk about the last and final crop, should be, should be 100% done.

00;11;01;23 – 00;11;18;20
Scott Stiles
Let’s get getting closer and say, yeah, that’s Mid-South is done. I guess there’s probably some few acres left and, and the, southeast, it may still like no harvest, but,

00;11;18;23 – 00;11;20;12
Riley Smith
We’re talking about cotton a little bit?

00;11;20;15 – 00;11;53;24
Scott Stiles
Yeah, yeah, talking about cotton and, a few changes in that. Yesterday they increased the national average yield 3 pounds, 792. And that led to, and a little increase in production. Is all this round figures almost 65,000 bales. It wasn’t a big change. USDA came in and revised. The southeast region, yields a little bit higher in the Mid-South, a little bit higher.

00;11;53;26 – 00;12;23;21
Scott Stiles
Remember Arkansas, for one? They increased the year or 75 pounds to 1275. Thats the state average. So that’s not a record. It’s a little still a little bit behind last year I think 20 pounds behind below last year. But I think the second highest state average yield. So Arkansas, they increase, yields in every Mid-South state except Tennessee.

00;12;23;23 – 00;12;56;28
Scott Stiles
But, they lowered yields a little bit in the southwest region and the far west. And the net change was the 65,000 bales talked about. That was really about the only only just what they made to it. They did a little tinker in, in this unaccounted category. That in the end, bumped ending stocks up 100,000 bales to 4.4 million.

00;12;57;00 – 00;13;22;06
Scott Stiles
Didn’t change the price outlook for the 24 crop. He left it at $0.66 So, there was a little, you know, a few changes on the world balance sheet. The increased the Indian crop a million bales. Brazilian crop, 100,000 bale. And, so the, you know, the world production went up, I think 1.2 million in total.

00;13;22;06 – 00;13;32;22
Scott Stiles
But most of that was larger, a little bit larger crop in Brazil and a million increase in India.

00;13;32;25 – 00;13;35;18
Riley Smith
Well, we’ll say,

00;13;35;20 – 00;13;40;00
Riley Smith
I guess it’s not necessarily bad news that we ain’t got much change.

00;13;40;01 – 00;14;00;12
Scott Stiles
Yeah, yeah, yeah. The right I mean, is it when you look it, you know, soybeans, nothing. Nothing there. Very minimal changes on cotton. No reduction in exports. All right. Really? Not much news, really, to report on those three. Corn was a big story.

00;14;00;15 – 00;14;11;16
Riley Smith
Wow. Well, it was good. It for it was good information and good insight to know though going into the year, fixing to go into the new year, went. So when’s the next WASDE report released.

00;14;11;16 – 00;14;12;08
Scott Stiles
okay.

00;14;12;11 – 00;14;40;18
Scott Stiles
Yep. January 10th then. And we’ll get, that WASDE will include the final, 24 production numbers for, grains and soybeans. In the January 10th report. They won’t release a final cotton production number till May, but, but for the other crops, they all will get, final crop production from NASS on January 10th. Well.

00;14;40;20 – 00;15;07;04
Riley Smith
Proper, for our listeners, that will probably be one of the very first episodes we, we try to hit on right out of the gate for January. I know that we’ve got one more week, and then we’re going to do a recap week. And then after that, we’re going to take a short intermission. We’re going to take a week off from podcast and newsletters, and then we’ll follow up and January 13th.

00;15;07;04 – 00;15;19;19
Riley Smith
So I would say that would probably be a great time to go ahead and knock out another WASDE Report, look at those final numbers for at least corn, corn, soybeans and rice.

00;15;19;21 – 00;15;52;09
Scott Stiles
Yeah, yeah, I just remind everybody that, and I know you covered this in a, in a previous podcast, but just, remind everybody about our 2025 crop budgets that are available online. And we encourage everybody to, to go in and, and, take a look at those and then. But, the beauty of, of those is they’re, you know, they’re, they’re spreadsheets and you can go in and change and, put in your own input cost and change input cost as they, as they adjust.

00;15;52;15 – 00;16;16;12
Scott Stiles
And, it’s a in a, in a spreadsheet type format, the budget becomes a living, you know, a document that you can change over the course of the years. Inputs change. And, and, we just remind everybody those are there. And, and we encourage everybody to take a look at them and, and, use them as part of their decision making when they’re trying to decide what to, what to plant.

00;16;16;12 – 00;16;19;13
Scott Stiles
And the proper crop mix for them in 25.

00;16;19;15 – 00;16;49;25
Riley Smith
Right. And you can find those crop insurance budgets, uaex.uada.edu, I actually just got through looking at that for, for the episode with Breana Watkins. So if you’re a producer or grower, please go look, check those out, put in your numbers and and try to, better manage better manage your farm, because looking forward and forecasting, Mr. Scott, I’m going to say they’re probably going to need it.

00;16;49;28 – 00;17;21;05
Scott Stiles
It’s nothing looks, really great at this point. And, but, like we talked about, it’s, the balance sheet tightened up quite a bit on corn. And I think nationally, that it corn could be the acreage winner. I think, there’s talk already that corn might pick up two and a half to 3 million acres in, in 25 and, and, so, that’s, starting to be discussed.

00;17;21;07 – 00;17;21;23
Riley Smith
Well.

00;17;21;25 – 00;17;34;01
Riley Smith
Mr. Scott, I want to thank you for taking the time today to jump on here and give us a quick update on the WASDE report released yesterday. And and thank you for, just joining us today. It’s been a pleasure talking to you.

00;17;34;03 – 00;17;48;29
Scott Stiles
Okay. Well, thanks for having me on Riley And I want to wish, all of our listeners a happy holidays and, best, best wishes and and, 2025. And I look forward to seeing you at our county meetings coming up, starting in early January.

00;17;49;02 – 00;18;22;09
Riley Smith
Yeah. Sounds great. Well, everybody stay tuned for my market report, Thanks. All right, guys, back with your market report March 25 Corn current prices at $4.48 per bushel month agos price is at $4.43 per bushel. That’s up $0.05 a year ago price was at $4.80 per bushel. That’s down $0.32. January 25 rice current price is at $15.04 per cwt a month ago price was at $14.59 per cwt

00;18;22;09 – 00;18;52;20
Riley Smith
That’s up $0.45 a year ago price was at $16.94 per cwt. That’s down $1.90. January 25, soybeans current price is at $9.99 per bushel. A month ago price is at $10.22 per bushel. That’s down $0.26 a year agos price is at $13.08 per bushel. That’s down $3.12. July 25 Wheat current price is at $5.80 per bushel a month ago.

00;18;52;22 – 00;19;20;06
Riley Smith
Price is at $5.98 per bushel. That’s up $0.18. That’s down $0.18. Excuse me. Year agos price was at $6.24 per bushel. That’s down $0.44. March 25 Cotton current prices at $0.70 per pound, month agos price is at $0.72 per pound. That’s down $0.02 a year agos price is at $0.81 per pound. That’s down $0.11 weekly

00;19;20;06 – 00;19;46;06
Riley Smith
U.S average for peanut current price is at $448 per ton, a month agos price is at $498 per ton. That’s down $50 a year ago price was at $504 per ton. That’s down $56. And that’s your weekly commodity futures, your input prices. This week, urea is at $480 per ton, ammonium nitrate at $465 per ton, ammonium sulfate is at $520 per ton.

00;19;46;06 – 00;20;17;04
Riley Smith
DAP is at $740 per ton, triple Super phosphates at $687 per ton. Potash is at $412 per ton, and pellet lime is at $225 per ton. Your weekly diesel prices this week, off road diesel is at $2.52 per gallon. Highway diesel is at $3.15 per gallon. And your Mississippi River level this week at Memphis, Tennessee. Client levels at -6.7ft in a year ago was at -6.14ft.

00;20;17;06 – 00;20;43;20
Riley Smith
I 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 enjoyed your morning coffee this morning as you tuned in. So until next time, we’ll catch you on the flip flop. Bye bye now!

00;20;43;22 – 00;20;44;04
Riley Smith