USDA’s June WASDE Preview: Minimal Changes Expected, But Corn Carries Big Questions
Anticipating Subtle Shifts Amid Global Market Volatility
The USDA’s next World Agricultural Supply and Demand Estimates (WASDE) report drops tomorrow at 11 a.m., and traders aren’t expecting fireworks. Average analyst estimates suggest minimal changes in carryout projections for corn, soybeans, and wheat. However, domestic corn dynamics, harvest timelines in Brazil, and grain stock movements could still shake up expectations. While a bump in Brazil’s corn production is widely anticipated, don’t be surprised if USDA defers updates until July. The agency often tends to take a “wait and see” approach.
US Domestic Picture: Corn Stands Out
The only major domestic shift expected in the report is an increase in corn exports, potentially 50+ million bushels. Strong international demand seems likely to offset any declines in ethanol use or Feed and Residual demand. New this morning, EIA printed a record all-time high for weekly ethanol production for last week. Futures spreads suggest that analysts should brace for a possible uptick in grain stock estimates at the end of the month, with June’s Grain Stocks and Acreage Reports looming.
Market Dislocation & Farmer Sentiment
Anecdotal insights suggest tighter corn supplies than the futures market implies. One commercial source reported that, in their region, “there isn’t much left to be sold” after being asked by the exporter when the farmer would sell more. For context, bids have been creeping higher while offers have disappeared. This disconnect could hint at USDA or market miscalculations.
Jul - Sep Corn Spread
Futures Spreads & Acreage Bias
The bearish push in both Jul-Sep and Sep-Dec corn futures spreads marks the weakest structure in five years. This signals a market bias toward higher corn acreage and hints that a price correction could follow if bearish assumptions prove overextended—especially with a large fund short in place.
Sep - Dec Corn Futures Spread
China’s Drought & Global Trade Implications
Finally, don’t overlook China. A persistent drought is raising concerns about their wheat and corn output. Dalian corn futures have been climbing, which may open the door to a potential resurgence in Chinese corn imports—even if US trade isn’t the direct beneficiary, it could cause ripple effects in origin demand and indirectly benefit US exports.
Dalian Corn nearby Futures
Source/s: Charts from Cmdtyview by Barchart
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Garret Brown
Founder | Market Advisor
Having grown up on a farm, Garret respects the wide range of skills needed to run a successful operation and recognizes farmers are often stretched thin trying to do it all. This understanding, along with his affinity for markets, fuels his drive to make tough marketing decisions simpler for farmers.
Leveraging his experience in grain origination and margin management, Garret analyzes technical and fundamental market information. With the assistance of CODAK’s algorithmic signaling platform, he puts together buy/sell recommendations while working with the CODAK team to create strategies that accommodate each farmer’s personal risk tolerance, on-farm storage capacity, and break-evens.