Market ignores ‘friendly’ crop report

CHARLOTTE, Mich. — At a glance, the July agricultural supply and demand estimates report looked positive for the market with lower than expected ending stocks, but the trade thought otherwise.

“Report-wise, everything, except soybeans, came in below what traders were expecting. Market-wise, they don’t care,” Angie Setzer of Consus Ag Consulting said in a live podcast minutes after the report’s July 11 release.

“Corn’s down 4 cents, soybeans are down 9 cents and wheat is down 7 cents,” she said. “Most of it, obviously, is trade influence. We’ve had a bit of an escalation here this week, you could say. We’ll see how it works out.

“We’ll see what the attitude is, how the markets close, but obviously, we’re testing the downside of support here on what would not be a bad report.”

The market continued that trend hours after the report’s release and closed with corn, soybeans and wheat seeing red.

Setzer and Consus Ag Consulting copartner Karl Setzer reviewed the key data from U.S. Department of Agriculture’s crop balance sheet report on their live podcast on X, formerly Twitter.

The report included several changes on the 2024-2025 old crop side that flowed their way into new crop beginning stocks for corn. What were the changes that led to that?

Angie: Looking at ending stocks for the old crop year in at 1.34 billion. Traders were anticipating a 1.353, so the USDA did go ahead and bump their exports up pretty substantially here, but they reduced feed and residual pretty solidly.

In June, feeding residual was about 5.75 billion bushels. USDA made a reduction of about 75 million on the feed and residual that allowed them to go ahead and bump exports up 100 million to 2.75 billion. That dropped old crop carryout down to 1.340 billion and carried that over into new crop as the beginning stocks.

For 2025-2026, we did see a reduction in corn harvested area and a reduction in overall production. USDA cut feed and residual on the new crop corn side of things by 50 million bushels and left ethanol and exports unchanged. That took carryout down to 1.66 billion bushels. The traders were expecting a 1.72 billion carryout.

So, the soybean numbers weren’t quite as friendly for the market?

Angie: Soybean carryout came in at 310 million bushels (for new crop), 15 million bushels higher than what traders were expecting. Old crop carryout is at 350 million bushels, slightly lower than what traders were anticipating. They were expecting old crop 358 million carryout.

On the soybean demand side of things, basically nothing changed. They dropped residual usage on soybeans about 15 million. So, old crop demand was left unchanged outside of residual. Residual went from 42 million to 27.

New crop residuals were left unchanged at 37. Crush was raised 50 million bushels on the new crop side. Exports were lowered 70 million bushels on the new crop side. Exports were lowered 70 million bushels on the new crop side, and that gave us a 310 million bushel carryout. That’s little bit higher than what traders were expecting at 302 million.

As was the case with corn, wheat also featured a slight surprise, right?

Angie: Wheat carryout came in lower than what traders expected. They were expecting carryout to come in at 895 million, and it came in at 890 million. That was because wheat production came in slightly higher than what traders were expecting on the all wheat side of things, but demand has been a bit better than what we were anticipating.

What were among the notable numbers on the global agriculture balance sheets?

Karl: Global corn stocks of 272.1 million tons are down 3.2 million from last month, 3 million less than what the trade was expecting.

Global soybean carryout came in at 126.07 million tons, slightly less than expected. That was a little bit of a bump from last month’s 125.3 million, but nothing to write home about.

World wheat numbers were 261.5 million tons and the trade was expecting 262.7 million, equal to last month.

So, the grain numbers came in less, corn considerably less that what the trade was expecting. The trade was expecting to see a build in corn carryout this month. Instead, we lopped 5 million metric tons off it.

I think if it wasn’t raining and it wasn’t a Friday, we’d have a different reaction to these numbers. But, unfortunately, I don’t think we’re going to get one.

This month’s report used acreage data based on the June 30 planted acres report, combined with yields based on a weather-adjusted trend assuming normal planting progress and summer growing season weather. How will next month’s report include yield survey results?

Angie: Yield was left unchanged in this report, which should have been one of the things that we knew was going to happen. They just got away from that.

They used to change yield, based on conditions and some of these other things, and it ended very badly. So, they stopped doing that in July.