February WASDE report offers few surprises

February 13, 2025 | Kriss Nelson

USDA’s February World Agricultural Supply Demand Estimates report caused little market reaction, remaining uneventful as experts predicted.

As Ever.Ag Grain Marketing Advisor Kristin Stein observed that February’s WASDE report was expectedly uneventful, being positioned between the larger January and March reports.

January’s WASDE report included a summary of 2024 crop production and quarterly grain stocks numbers, and the upcoming March WASDE will include 2025 planting intentions.

“Historically, February isn’t a big report, so it was definitely a snoozer, with the market showing little response intially,” says Stein. “USDA had already taken their cut to demand last month when they lowered soybean and corn yields, thinking that would drive prices, which it did. Typically, higher prices lead to softer demand, but so far, domestic soybean usage has been holding well.”

According to USDA, global 2024/25 soybean supply and use forecasts include lower production, higher use and lower ending stocks. Production is reduced for Argentina and Paraguay due to persistent heat and dryness during January. Brazilian soybean production is unchanged at 169.0 million tons. Beneficial weather in the Center-West is boosting soybean prospects, but drier weather in the south accelerated soybean development at the expense of yields.

Stein says this was somewhat a surprise, as she was expecting Brazilian soybean production to go up.

“Although Brazil is lagging behind in a big way from a harvest perspective because the rain they have been getting has kept them out of the field, the yields are strong for the harvest they have been able to get started,” she says. “There is no reason to expect that won’t be the case going forward.”

What could this mean for the immediate export demand for soy?

“We have commitments of export purchases; now the biggest question is, will we see those become shipments? I wouldn’t be surprised if Brazil continues to come in with a record crop if some cancellations come our way,” she says.

In addition to the delayed harvest being in U.S. soy demand’s favor, so is the value of the Brazilian real compared to the U.S. dollar.

“It is not making us the cheapest option, but it is still keeping us competitive,” says Stein. “When the dollar is cheaper than the real, it keeps us in the game.”

The market’s response, or lack thereof

Stein says the market showed little reaction to February’s WASDE report with new crop dropping a few cents and old crop falling a little over a nickel.  

“The past week, we have watched new crop gain more traction than the old crop,” she says. “I think the market has its pulse on the old crop now that the surprises have come from the last couple of WASDE reports. I feel like we have a better pulse there, and now all eyes focus on the new crop.”

Anticipating the March WASDE report

The biggest question for the March WASDE report is: will soybean demand continue? Stein says the answer depends on any purchase cancellations between now and then.

She also notes world-ending stocks may increase if the South American harvest wraps up, followed by a successful safrinha planting.

March also brings the much-anticipated Prospective Plantings report.

This report is a survey conducted by the USDA’s National Agricultural Statistics Service (NASS) that provides the first official estimate of what crops farmers across the United States plan to plant in the upcoming growing season based on data collected from surveys of farmers during the first two weeks of March, revealing their intended acreage for major crops like soybeans and corn.

“I think there is going to be a lot of corn acres,” says Stein. “When you look at the soybean to corn price ratio, it heavily favors corn, and anytime we’ve been at that price ratio in the past, on average, farmers have added four million acres to the balance sheet. We also consider we had a good amount of soybean acres last year, so the natural rotation is to switch to corn; then you have corn on corn acres on top of that.”

If farmers report a shift toward more corn acres, could that support new crop beans?

“It might provide a skosh of support for new crop beans, but I want to be careful when I say that for the sheer fact, we are still sitting on the world’s largest ending stocks of soybeans with a mountain of Brazilian production headed our way,” says Stein.

---

Back