What Farmers Should Know Ahead of the November WASDE

The November World Agricultural Supply and Demand Estimates (WASDE) report is due Friday, Nov. 8. Going into the report, here is some context to know for the corn, soybean, and wheat markets and what Grain Market Insider will be looking for in the updated balance sheets.

Corn Market Expectations

October’s WASDE report wasn’t a large needle mover: The market was expecting a smaller carryout number and the USDA obliged. 

While carryout was lowered, it came in higher than expected due to an increase in yield to 183.8 bushels per acre (bpa) from 183.6, versus expectations of 183.4 bpa. This offset a lower beginning stocks number that was carried in from the 2023/2024 balance sheet, bringing the October 2024/2025 carryout estimate to 1.999 billion bushels, 58 million bushels less than the September projection, and 37 million higher than the average trade guess.  

With harvest in the home stretch, anecdotal yield estimates have remained strong, with some exceptions, despite the dry finish to the growing season. Which begs the question, will the USDA raise its yield estimate again? 

Additionally, demand has been strong with export sales steadily surpassing the USDA’s projected pace. Total sales commitments are, at the time of writing, 40% of the USDA’s forecasts, compared to the five-year average of 35% sold by this time, and ethanol production remains strong as well, running 4% ahead of last year at this time. 

While some in the trade believe that export sales may be front loaded due to the election, the current pace could argue for another small reduction in ending stocks. Any increase in demand could be offset if the USDA decides to increase yield.

Soybean Market Outlook

As the market went into last month’s October WASDE report, trade expectations were for little to no changes in the supply/demand outlook — and the USDA largely met those expectations. 

Ending stocks for 2024/2025 soybeans remained unchanged from the September report at 550 million bushels, with the average yield estimate only slightly reduced to 53.1 bpa, aligning closely with the average trade guess. 

Soybean harvest is nearly complete. While yields have remained strong anecdotally, there has been greater variability due to the dry finish, which could still prompt the USDA to adjust yield estimates. 

On the demand side, domestic demand remains solid with strong crush margins, and export demand has seen a recent uptick in sales. However, total export commitments for the 2024/2025 marketing year are still sluggish and lag behind the pace needed to meet the USDA’s goal. Normally, total soybean sales by this time of year reach 53% of the USDA’s projection, whereas they are currently running at 48%, suggesting the USDA may be overstating export demand and leaving room for a possible reduction in this month’s WASDE report.

Considerations for the Wheat Market

Last month, the USDA reduced its 2024/2025 U.S. wheat ending stocks estimate to 812 million bushels, down from the September projection of 828 million. This adjustment was primarily due to reduced carry-in from the previous marketing year and a decrease in yield from 52.2 bpa to 51.2 bpa, rather than from increased demand. 

Export sales have remained steady since last month’s report, and, at the time of writing, year-to-date commitments are up 18% from last year, compared to the USDA’s current forecast of a 17% increase. Additionally, the current sales pace of 58% sold remains slightly ahead of the five-year average of 57%. 

While Russia continues to dominate the world wheat market, other exporters (like the EU) have faced smaller crops and lower export sales, which could benefit the U.S. and help explain the solid pace of U.S. wheat sales. 

This has some in the trade leaning toward a potential increase in the USDA’s projected wheat exports, which could, in turn, further reduce ending stocks in the upcoming November report.

Historical Patterns and Statistical Perspective

Based on data from 1993 to 2021, Grain Market Insider’s internal research indicates that volatility on November WASDE report day tends to result in more negative reactions for soybeans and wheat than for corn, which generally leans more positive. 

For corn, the November report tends to close positively about 55% of the time. In terms of outright volatility, this report ranks eighth out of the 12 WASDE reports. When examining upward or downward moves, the average positive net change on report day is 1.74% (about 7¢), while the average negative net change is closer to 1.51% (about 6¢).

For soybeans, the November report ranks slightly higher in outright volatility than for corn, being the fifth most volatile of the 12 WASDE reports. In terms of bullishness versus bearishness, the November report for soybeans tends to be the most bearish, with negative net changes occurring 64% of the time compared to 36% positive reactions. This may explain the relatively large 2.33% average gain (about 23¢) resulting from a positive reaction, as traders likely position themselves for a negative report, versus an average 1.14% loss (about 11¢) on a negative report.

Lastly, for wheat, November WASDE report volatility ranks sixth in terms of volatility among the 12 reports, with an average net change of 1.69% (about 9.75¢). When broken out by positive versus negative reactions, the wheat market tends to close lower 59% of the time, compared to a positive close 41% of the time. Positive reactions average a 1.73% gain (about 10¢), while negative reactions yield a slightly smaller 1.66% loss (about 9½¢).

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About the Author: Scott Masters is the editor of Grain Market Insider by Stewart-Peterson Inc., and Director of Market Analytics with Total Farm Marketing by Stewart-Peterson. Scott has over 30 years of grain marketing experience which includes trading grain options on the floor of the Chicago Board of Trade, and merchandising corn and soybeans at a local co-op in Eastern Iowa. Scott’s primary focus at Total Farm Marketing is helping grain farmers manage their operations’ market opportunities and risks.