Posted on December, 13, 2024 at 07:23 am
The final supply-and-demand report of the year from the US Department of Agriculture tends to offer more year-end recap than abrupt revelations, but the Dec. 10 World Agricultural Supply and Demand Estimates (WASDE) report brought a few surprises for corn and soybean oil, with the wheat outlook mostly benign.
The USDA forecast the carryover of corn on Sept. 1, 2025, at 1.738 billion bushels, down 200 million bushels, or 10%, from 1.938 billion bushels projected in November, down 22 million bushels from 1.760 billion bushels estimated in 2024, and well below the range of pre-report trade expectations.
The sharp shift to the downside primarily was reflected in the large boost to projected exports. The Department pegged 2024-25 US corn exports at 2.475 billion bushels, up 150 million bushels from the prior month’s outlook of 2.325 billion bushels, and the highest export forecast since the 2020-21 marketing year. The USDA also raised its forecast for ethanol and byproducts usage to 5.500 billion bushels, up 50 million bushels from last month.
While the major dip in ending stocks caught many in the trade off guard, there was an expectation that the USDA would increase the export volume. Since September, US corn exports have been surging, with the pace of sales in the last few months tripling the typical five-year average pace, and with Mexico again emerging as the top buyer to date. In 2023-24, Mexico imported a record 24.5 million tonnes of US corn, approximately 40% of all US corn exports during that period, according to data compiled by the USDA.
“Mexico is frontloading corn imports here — that’s certainly part of it,” said Brian Harris, executive director and co-owner of Global Risk Management, indicating a rush to secure supplies ahead of the transition to a potentially tariff-laden Trump administration.
Exports of US soybean oil also have experienced a significant upswing in 2024, largely due to the spike in palm oil prices, which leapt to two-year highs on concerns of reduced output related to weather impacts and higher domestic usage anticipated in top-producer Indonesia.
“Palm oil had been trading at a premium to soybean oil on the world market,” Harris said. “If you’re a global buyer, you’re not going to buy a lower grade oil like palm when you can buy a higher-grade soybean oil at a discount.”
Source: World Grain