EGG‑NEWS.com

OVERVIEW

The USDA provided pre-planting values for the production of corn and soybeans in the April 11^th World Agriculture Supply and Demand Estimates (WASDE) #647, reflecting the anticipated 2024 crop. Most values were understandably unchanged from the March edition given the month and are based on projections of acreage, yield, carry-forward levels from 2023, and with realistic assumptions of domestic use and exports giving rise to ending stocks.

The April 11^th WASDE report predicted that corn would be harvested from 86.5 million acres, unchanged since February. The soybean crop will be harvested from 82.4 million acres also unchanged.

The most recent report retained the yield value for the 2024 corn crop at 177.3 bushels per acre. By comparison yield was 174.9 bushels per acre in 2023. The soybean yield was held at 50.6 bushels per acre compared to 49.9 bushels per acre in 2023.

The April 2024 USDA projection for the ending stocks of corn was 2,152 million bushels, down 2.3 percent from 2,172 million bushels in the March WASDE. The April 2024 USDA projection for the ending stock of soybeans was 340 million bushels, up 7.9 percent from 315 million bushels in March.

The April 2024 WASDE lowered the ex-farm price of corn by 5 cents to 470 cents per bushel. The projected average season price for soybeans was reduced 10 cents per bushel from the March WASDE of 1,255 cents per bushel. Soybean Meal was unchanged at $380 per ton.

Projections for world production included in the March 2024 WASDE report reflect the most recent estimates for commodities in the Southern Hemisphere with an emphasis on Argentine and Brazil. Economists also evaluated the likely impacts from hostilities in Ukraine with occupation of ten percent of the Nation’s land area by the Russian Federation and following extensive destruction of agricultural infrastructure. It is evident that production and hence exports of wheat, corn and sunflower from Ukraine will be reduced compared to pre-war averages. Exports from Ukraine have been restored following the collapse of the Black Sea Grain Initiative and destruction of Black Sea and Danube Delta port installations. These adversities have been partly overcome by aggressive naval action allowing the “Humanitarian Corridor” that traverses the national waters of friendly countries along the western Black Sea coast.

It is accepted that USDA projections for export are also based on the perceived intentions and needs of China. This Nation has sharply curtailed purchases of commodities and especially U.S. soybeans during the current market year despite drought and taking into effect relaxation of COVID restrictions on consumers with higher demand.

Reports on volumes of commodities exported are included in weekly editions of EGG-NEWS, derived from published USDA-FAS sales data.

CORN

Based on increased yield and acreage projections for the 2024 corn harvest, January through April WASDE Reports predict a crop of 15,342 million bushels compared to 15,234 million bushels in 2023. The U.S. 2023 harvest was a record, 2.0 percent above the previous record harvest of 15,148 million bushels in 2016. The “Feed and Residual” category was unchanged from February at 5,675 million bushels. The Feed and Seed category was retained at 1,405 million bushels. The “Ethanol and Byproducts” Category was raised 7.0 percent to 5,700 million bushels consistent with estimated demand for E-10 and higher blends. Gasoline consumption is now less restrained despite higher prices and changes in commuting patterns reflecting a recovery from COVID restrictions. Projected corn exports were unchanged at 2,100 million bushels, based on recent orders, and despite the volume of projected shipments to China and taking into account the anticipated lower availability of coarse grains from Eastern Europe. The USDA considers world weather patterns in projections including the effect of a transition to a La Nina event. Ending stocks of corn in the April WASDE report were down 2.3 percent to 2,122 million bushels.

The forecast USDA average season farm price for corn in the April WASDE report covering the 2024 crop was reduced 5 cents to 470 cents per bushel. At 14H00 on April 11^th after the noon release of the WASDE the CME spot price for corn was 428 cents per bushel, down 2.7 percent from the quotation on March 8^th and down 8.9 percent from the April USDA projection.

APRIL 2024 WASDE #647 Projections For The 2024 Corn Harvest:

1 metric ton = 39.368 bushels

Average Farm Price: 470 cents per bushel. (Down 5 cents per bushel from from the March WASDE Report reflecting the 2024 projected crop)

SOYBEANS

Based on a prediction of acreage to be planted, the USDA April WASDE projected the 2024 soybean crop at 4,165 million bushels with an estimated yield of 50.6 bushels per acre from 82.4 million acres harvested. Crush volume was unchanged from the March WASDE report at 2,300 million bushels. Projected exports were lowered 1.2 percent to 1,700 million bushels based on reduced exports to China. Ending stocks were anticipated to be 340 million bushels, up 7.9 percent from the March WASDE report.

There is uncertainty over orders from China for the current 2023-2024 market year. This is attributed to competition from Brazil and an assumption of lower requirements for animal feed despite relaxation of previous strict COVID restrictions. In reality traders in China are obligated to order on a stable or declining market unless faced with shortages. Prior to 2018, China, the largest trading partner for U.S. agricultural commodities, imported the equivalent of 25 percent of U.S. soybeans harvested.

The USDA February 2024 projection for the ex-farm price for soybeans for the 2024 harvest was down 10 cents per bushel from the March WASDE report to 1,255 cents per bushel. At 14H00 on April 11^th following release of the WASDE, the CME spot price was 1,158 cents per bushel, down 2.3 percent compared to the March 8^th quotation and 9.2 percent below the April USDA projection.

APRIL 2024 WASDE #647 PROJECTION FOR THE 2024 SOYBEAN HARVEST:-

1 metric ton = 36.74 bushels

Average Farm Price: 1,255 cents per bushel (Down 10 cents per bushel from the March 2024 WASDE Report)

SOYBEAN MEAL

The projected production of soybean meal from the 2024 soybean crop will be 54.25 million tons. This was unchanged from the March WASDE and consistent with an unchanged crush of 2,300 million bushels of soybeans. This figure is questioned based on increased demand for biodiesel with a proportional increase in U.S. crushing capacity. Production is driven both by exports and domestic consumption for livestock feed and for soy oil supplying the food and biodiesel segments. The projection of domestic use was unchanged at 39.03 million tons. Exports were held at 15.8 million tons. The USDA retained the ex plant price of soybean meal at $380 per ton as an average for the 2023-2024 season based on supply and demand considerations as reflected in an unchanged ending stock of 400,000 tons representing 0.7 percent of supply.

At 14H00 on April 11^th the CME spot price for soybean meal was $336 per ton, down 1.8 percent compared to the April 11^th CME quotation and $44 per ton or 11.6 percent lower than the March WASDE projection of $380 per ton.

APRIL 2024 WASDE #647 PROJECTION OF SOYBEAN MEAL PRODUCTION AND USE

(Quantities in thousand short tons)

Average Price ex plant:  $380 per ton (Unchanged from the March WASDE Report)  

IMPLICATIONS FOR PRODUCTION COST

The price projections based on CME quotations for corn and soybeans suggest stable feed production costs for broilers and eggs.  Going forward, prices of commodities will be determined by World supply and demand and U.S. domestic yield, use and exports.

For each 10 cents per bushel change in corn:-

• The cost of egg production would change by 0.45 cent per dozen
• The cost of broiler production would change by 0.25 cent per live pound

      For each $10 per ton change in the cost of soybean meal:-

• The cost of egg production would change by 0.35 cent per doze
• The cost of broiler production would change by 0.30 cent per live pound.

WORLD SITUATION

With respect to world coarse grains and oilseeds the February 2024 WASDE Report included the following appraisals by USDA:-

COARSE GRAINS:

“Global coarse grain production for 2023/24 is forecast 2.3 million tons lower to 1,505.1 million. This month’s foreign coarse grain outlook is for declines in production, trade, and ending stocks. Foreign corn production is forecast lower as cuts for South Africa, Argentina, Mexico, and Moldova are partially offset by increases for the EU and the Philippines. Corn production is cut for South Africa as a continuation of drought during March further reduces yield prospects. Argentina and Mexico are both lowered reflecting a decline in yield expectations. EU corn production is raised mostly reflecting increases for Hungary, Poland, Spain, and France that are partly offset by declines for Romania, Slovakia, and Bulgaria. Foreign barley production is virtually unchanged”.

“Major global trade changes for 2023/24 include lower forecast corn exports for South Africa, India, and Tanzania but an increase for Russia. Corn imports are lowered for the EU, Saudi Arabia, Bangladesh, Thailand, Cuba, and Kenya but raised for Mexico. Barley imports are raised for China but lowered for Saudi Arabia and Algeria. Foreign corn ending stocks are essentially unchanged, mostly reflecting declines for Mexico and South Africa that are offset by small increases for several countries. Global corn ending stocks, at 318.3 million tons, are down 1.4 million from last month”.

OILSEEDS:

Global 2023/24 soybean supply and demand forecasts include lower production, exports, crush, and nearly unchanged ending stocks. Soybean production is lowered mainly for South Africa on drought conditions during the season, which negatively impacted yield potential. Partly offsetting is higher production for Paraguay, up 0.2 million tons to 10.5 million.

Global soybean exports are lowered 0.5 million tons to 173.1 million mainly on lower exports for the United States and South Africa partly offset by higher shipments for Paraguay. Imports are lowered for Indonesia, Russia, Algeria, and the United States, but raised for the EU. Global soybean ending stocks are nearly unchanged with higher stocks for the United States offset by lower stocks for Canada, Iran, and Russia.

*Values rounded to billion metric ton

  (1 metric ton corn= 39.37 bushels)  (“ton” represents 2,000 pounds)