Market bulls will be searching for any clues to break the market's fall when USDA releases its July Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports at 11 a.m. CDT on Friday, July 11.

CORN

It has certainly been a rough spring and early summer for corn prices, as September futures have lost over 60 cents of value from mid-April highs, with losses accelerating in recent weeks amid rising crop ratings from USDA. It has also been a moderate and amply wet climate for the Corn Belt, which has been continuously extended, pushing off the originally forecast hot-and-dry spell that was long expected by midsummer 2025. On Friday, however, traders will take at least a brief pause from the weather trade to see what USDA has to say regarding corn fundamentals.

For Friday's report, the Dow Jones pre-report survey shows the average guess among analysts to be 1.342 billion bushels (bb) of carryout for the 2024-25 season. In fact, 10 of the 15 analysts included in the survey are predicting USDA to cut the old-crop carryout. If this cut occurs, increased exports are very likely to be the driver, as corn shipments through the last full week of June are running 27% ahead of the same time in 2024, with USDA currently estimating a 16% increase. Another 25- to 50-million-bushel (mb) increase may be appropriate, but I believe USDA will be cautious here given the seasonal tendency for exports to slow ahead of harvest.

For the new-crop 2025-26 balance sheet, it is somewhat rare to see USDA alter the corn yield in the July WASDE, so I expect the record trend estimate of 181 bushels per acre (bpa) will remain in place. Meanwhile, the balance sheet will feature slightly less acreage than in June, at 95.2 million acres (ma), in accordance with the June 30 report findings. Assuming the average trade guess for 2024-25 carryout (2025-26 beginning stocks) is correct at 1.342 bb, and no other demand changes at this point, the 2025-26 carryout would drop to 1.710 bb. That is slightly less than the average trade estimate of 1.733 bb, according to the Dow Jones survey, but within the range of guesses. This would be roughly 300 mb less than the estimate for new-crop stocks in the July 2024 WASDE report.

Finally, the market will be very interested to see how USDA sees Brazilian corn production after a month of widespread speculation and fearful trading centered on the potential for a large increase from the previous USDA estimate of 130 million metric tons (mmt). Analysts do expect to see an increase here, with the average estimate calling for 133 mmt of Brazilian corn production. This is seen in turn as pushing world stocks higher for the 2024-25 season as well.

SOYBEANS

It is hard to picture that less than a month ago the discussion was whether November soybean futures would push to a new 2025 high, falling just a penny and a half short of doing so. Now, just a few weeks later, prices have fallen over 60 cents per bushel and recently broken through support, which had held since early April, paving the way for a decline towards $10.00.

For Friday's WASDE report, opinions are split on what to expect in the old-crop balance sheet. The June 30 report gave the market a bit of a surprise when June 1 stocks were estimated to still be north of 1 bb. In fact, it is still a bit of a head scratcher to me given the record-setting pace for soybean crush as well as soybean exports that have held stubbornly to a short lead over USDA's estimated pace. If there has been a demand slip, it seems that it must be coming from the seed and residual bucket, which is of course the most difficult to predict ahead of time. For Friday, analysts surveyed by Dow Jones expect, on average, to see a slight increase in stocks to 358 mb. However, as mentioned, the results of the survey are largely mixed, with seven analysts expecting increases, three expecting decreases and five expecting stocks to be held at 350 mb.

For the new-crop balance sheet, it is again unlikely that we will see a change to the yield estimate, so expect to see the record 52.5 bpa yield hold in Friday's figures. Assuming the previously mentioned estimate of 358 mb of carry in stocks is accurate, using the June 30 acreage estimate of 83.4 ma would imply a carryout in 2025-26 of 305 mb, right in line with the average trade guess from the Dow Jones survey of 304 mb, and up from the 295 mb estimate in June. The export demand estimate may be one to watch on Friday given some of the trade anxiety specifically regarding China. But given it is still early, and sales thus far are ahead of last year, I think the 1.815 bb estimate from USDA is fair.

For world soybean fundamentals, there shouldn't be many surprises on Friday, as traders expect both old- and new-crop stocks to hold very close to their estimates from June at 124.2 and 125.3 mmt, respectively. Slight production increases are expected in South America, with Brazilian production expected to expand to 169.4 mmt from the long-standing 169 mmt estimate, while Argentine production is expected to show a similar increase to 49.3 mmt, up from 49 mmt in June.

WHEAT

The wheat market comes into the July WASDE under a separate set of circumstances as compared to corn and soybeans, with the U.S. winter wheat harvest now over halfway complete, and the early stages of harvest underway for top world producers in the European Union as well as Russia.

For Friday's report, analysts are anticipating a slight decline in the USDA's estimate for 2025 U.S. wheat production, with the estimate for total production of 1.903 bb, which would be down from 1.921 bb in the June report. For winter wheat, the June Acreage report featured a reduction in USDA's estimate for harvested acreage of 888,000 acres to 24.83 ma. The Dow Jones survey's average estimate for winter wheat production is 1.349 bb, down from 1.382 bb in June, but would imply an increase in winter wheat yield to 54.3 bpa, the largest since 2016 if true. I am a little unconvinced the yield will be this stout given some excess moisture in areas in the Southern Plains leading to harvest delays as well as concerns over disease in some areas. For this reason, I am personally erring to the lower side of the pre-report range, which spans from 1.297 bb to 1.401 bb for the 2025 U.S. winter wheat crop. Assuming the June 1 stocks estimate from the report on June 30 is still accurate, and assuming no changes to the demand side, we can reasonably expect new-crop wheat stocks to modestly decline on Friday, with my estimate being 890 mb, which is in line with the Dow Jones survey estimate among other analysts of 893 mb.

For the world wheat outlook, traders are expecting an uptick in world stocks for 2025-26, driven partially by a perceived increase in old-crop carryout, but likely driven by strong crops in both the EU as well as Russia. As always, the Russian export estimate will be of interest, estimated in June at 45 mmt, a 1.5 mmt increase from the current marketing year. China is also a country I am interested about on Friday, given the hot-and-dry conditions that were experienced through much of the spring. The 2025 winter wheat harvest in China is drawing to a close, so the estimate from USDA on Friday should hold the higher degree of accuracy compared to previous USDA estimates.

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Join us for DTN's webinar at 12:30 p.m. CDT, Friday, July 11, as we discuss USDA's new estimates in light of recent market events. Questions are welcome, and registrants will receive a replay link for viewing at their convenience. Register here for Friday's July WASDE report webinar: https://www.dtn.com/….

Rhett Montgomery can be reached at rhett.montgomery@dtn.com

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