USDA's WASDE report drives grain prices down

Jan 15, 2024

The recent release of the USDA's World Agricultural Supply and Demand Estimates (WASDE) report on (Thursday, January 11, 2024) had a significant influence on grain prices, causing a notable downturn in the market. Corn prices saw a decline of nearly 2%, with March futures trading at $4.4875 and May futures at $4.6050. Meanwhile, soybeans faced substantial losses in January and March futures. 

The WASDE report delivered bearish data that caught the market off guard, prompting technical selling in corn and soybean futures. This data had a noticeable impact on market sentiment, pushing prices lower and raising concerns among investors and farmers alike. 

In the central United States, there is optimism as NOAA's precipitation map indicates that most areas will receive much-needed moisture over the next few days. On Wall Street, there was some volatility, with energy futures showing moderate gains, including crude oil, which climbed to over $72 per barrel. 

USDA's report highlighted record average corn yields of 177.3 bushels per acre, leading to increased production estimates. Corn usage also saw a boost, particularly in the ethanol and feed sectors. However, higher supplies resulted in an uptick in 2023/24 corn ending stocks, affecting the season-average farm price. 

Soybean production estimates also rose, with average yields at 50.6 bushels per acre, contributing to higher production figures. Soybean stocks increased as well, influencing prices in the market. The soybean complex faced challenges, with declines in soymeal and Soy oil prices. 

In the wheat market, prices experienced a mixed trend, but with an overall downward trajectory. Spillover weakness from corn and soybeans influenced some contracts to turn negative. USDA's report lowered wheat ending stocks, but winter wheat seedings for the upcoming season are expected to decrease. 

Source : wisconsinagconnection
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