Following the release of the June WASDE report yesterday, grain markets headed higher, but profit-taking and a red screen are a reality this morning.
“The excitement of learning separates youth from old age. As long as you’re learning you’re not old.” – Rosalyn Yalow (American Nobel Prize winner)
June WASDE Gets Some Short-Lived Excitement
After yesterday’s day mostly spent in the green following the release of the June WASDE, grain markets this morning are all in the red. The complex isn’t pulling back on fundamentals, but more profit-taking, especially for corn prices and wheat prices.
Garrett did a live update of the June WASDE on our FarmLead Insights page yesterday, as the market digested all the numbers. Winter wheat prices finished the day up 15 cents for most contracts spring wheat prices also gained, but only about half that.
The June WASDE dominated the headlines yesterday, which was a nice reprieve from all the G-7 Summit and North Korea talk going on lately. This in mind, I have to apologize for providing a quote in Monday’s Breakfast Brief that was wrongly attributed to US President Donald Trump. It was in fact not his Twitter account. That’s my bad although I stand by the reality that the underlying rhetoric is pretty much the same regarding poor political relations between the US and Canada.
On a happier note for the North American continent, the 2026 World Cup of soccer (or football, as everyone else calls it) will be hosted by Mexico, Canada, and the US!  Maybe the leads for each country can get invited to help re-negotiate NAFTA so we can get that one out of the way too!
Also on a happy note, there have been some incredible updates we’ve been making to the FarmLead Marketplace. Check out what’s new on the platform this month, including new offer types that you can post, as well as map views!
Also impacting markets today will be the US Federal Reserve, who is expected to increase interest rates again. 
Corn, Soybean Carryout Lowered in June WASDE
For our GrainCents readers yesterday, we provided a quick snapshot of the main takeaways of the June WASDE for 8 of the 12 crops that we cover (for flax and pulses, the WASDE report doesn’t provide any in-depth numbers). For all crops though, we’ll be providing our usual deeper analysis in the Sunday GrainCents Weekly Digest.
The June WASDE report showed a decline in both old crop and new crop corn ending stocks. Also, a bit surprising? The situation in South America where the crop continues to be downgraded. Since the USDA rarely touches corn production numbers in the June WASDE report, it’s estimated that American farmers will still produce a 14.04 Billion-bushel crop. This would be 4% higher year-over-year.
The USDA also doesn’t touch the US soybean yield number, so again, US production was left alone at 4.28 Billion bushels. However, the agency reported higher crush numbers and a significant reduction in 2018/19 US soybean ending stocks, when the market was expecting a slight increase.
For the usual WASDE report, the world canola balance sheet doesn’t garner a whole bunch of attention. The June WASDE didn’t change that rhetoric; however, there are ideas that some spillover from soybeans is helping world canola prices find a bottom.
Big Cereal Crops Again in 2018/19?
As previously mentioned, wheat prices were the star though following the release of the June WASDE report. For winter wheat, the USDA followed the lead of other private firms in lowering the size of the Russian 2018/19 wheat crop by 3.5 million tonnes to 68.5 million tonnes. They also dropped exports by 1.5 million to 35 million tonnes for the new crop year. In both the US and global, wheat ending stocks were raised slightly for 2017/18 but lowered for 2018/19.
For spring wheat prices, spillover buying from winter wheat supported values in Minneapolis. While we won’t get an update on the US spring wheat crop until next month, we do know that total 2018/19 US wheat production was pegged at 1.827 Billion bushels in this report. This was about 5 million bushels more than what the market was expecting. Also, US hard red spring wheat 2017/18 ending stocks were raised by 5 million bushels to 200 million. Finally, we saw ending stocks raised in both Canada and Australia.
For durum wheat, we saw US exports lowered to the lowest they’ve been in recent memory, at 20 million bushels. This decrease by 5 million bushels month-over-month meant US 2017/18 durum carryout was raised by the same 5 million bushels to now sit at 36 million (or a bit less than 1 million tonnes).
For oats, US 2017/18 imports were raised by 3 million bushels to 90 million tonnes. With all other values unchanged, this pushed 2017/18 AND 2018/19 US oats ending stocks higher by 3 million bushels each to 24 and 29 million bushels, respectively. Global 2018/19 oats carryout is also forecasted to come in around 6% higher year-over-year, at 2.6 million tonnes.
In the barley crop, nothing was changed for the US crop, but the global barley balance sheet had some notable changes. Both 2017/18 and 2018/19 global barley carryout were raised to 18.55 and 17.73 million tonnes respectively. This, despite world barley production in 2018/19 being lowered by 610,000 tonnes month-over-month to about 147 million tonnes in this June WASDE report.