Suderman: USDA ‘Aggressive’ in Cutting Corn Stocks in WASDE Report

“Aggressive” was the word that Arlan Suderman, Chief Commodities Economist with the StoneX Group, used several times in his description of the reduction of corn stocks from the USDA’s December World Supply and Demand Estimates (WASDE) Report, which was released on Tuesday.

“USDA came a little bit out of character in this report,” says Suderman. “First of all, December [WASDE] reports are normally kind of snoozers with no big adjustments. Second of all, USDA really got aggressive in cutting both domestic and global corn stocks with increased usage estimates. They were also certainly aggressive for one month’s type of a move and certainly aggressive for that one month being in December.”

“The biggest move was a 150 million bushel increase in U.S. corn exports, combined with a 50 million bushel increase in U.S. ethanol demand for corn—and you throw in an increase of 2 million metric tons, which would be about 80 million bushels, for domestic use in Brazil, as well as a little bit of an increase in in domestic use in Ukraine and a few other little adjustments, and suddenly we cut the world stocks by nearly 8 million metric tons, which should be over 300 million bushels, so USDA cut much more than expected.”

The data from the report push corn prices higher on Tuesday. The March contract closed 7 ¼ cents higher at $4.49 a bushel. The season-average corn price received by producers is steady at $4.10 a bushel.

Meanwhile, U.S. soybean supply and use projections are unchanged from last month. March soybeans closed 4 ¾ cents higher at $10.00 ¼ a bushel. The U.S. season-average soybean price is forecast at $10.20 a bushel, down sixty cents from last month.

This month’s 2024-2025 wheat outlook is for slightly larger supplies, unchanged domestic use, increased exports, and lower ending stocks. While projected wheat ending stocks are reduced by 20 million bushels to 795 million, it’s still 14 percent higher than last year.

On Tuesday, 3 cents higher at $5.61 ¾. March wheat closed The season-average farm price is unchanged at $5.60 per bushel.

CLICK BELOW to hear the full analysis from Arlan Suderman of USDA’s December WASDE Report.