Episode 96 - July WASDE Friendly to Grain Markets

 Hunter Biram is joined by Scott Stiles to go through the July 2026 WASDE report and what it means for Arkansas producers. They cover the sharp cut to long-grain rice production, now the smallest crop since 1993, and a higher price outlook. The conversation also gets into the surge in Arkansas soybean acres, a tighter corn balance sheet tied to European drought, and a larger cotton crop. With harvest running weeks ahead of schedule, better prices still aren't enough to fully offset rising input costs. 

Transcript

Dr. Hunter Biram 0:16

Well, good morning to you. I'm going to say again, because we've already recorded this once, but, or we thought we did, but good morning to you. And welcome to another episode of Morning Coffee and Ag Markets. My name is Dr. Hunter Biram, and with me in the I'm calling it the mobile rice studio, is Mr. Dr. Professor Scott Stiles. Scott, how you feeling about doing this for for a second time?

Scott Stiles 0:38

Good morning again. Okay.

Dr. Hunter Biram 0:40

Oh gosh. Take two. Yeah, take take two. But for you all listening, uh, on a more serious note, so we had the USDA July WASDE report that was released last week. And to be fully transparent with you all, I missed it. I was traveling all week last week, all along the mountains for, for work. I was actually at the County Ag Agents Conference, Scott, National Association of County Ag Agents, and I was also at a meeting for Extension Risk Management Education. And and then I missed the report and got in this week and had to prep for a couple presentations today, which is Wednesday, July 15th, is when we're recording this. And so, I'm just so glad that I've got so much wisdom and knowledge sitting across the table from me right now. And he doesn't just have that though, he has so much grace, because we literally recorded probably the best episode we've ever recorded. And then I told him I said, Scott, I got some bad news, this isn't recording. And so, so we're here doing it again. And with that, I just want to open this up and say, Scott, I'm so glad to have you, and I'm glad to still have you and that you haven't uh fired me yet and that you haven't ran out the door. But let's just dive into this July WASDE here and let's, let's start with rice.

Scott Stiles 1:51

Okay. That sounds good. I think this was this was the one where they made the probably the most changes to in July. Of course, we expected that with the large reduction in acres we saw in June. But a lot of the you know, looking at the new crop balance sheet for for long grain. Some aspects of it were just offsetting adjustments. Beginning stocks came in four million lower and USDA increased imports by, by four million. So we're just an offset there. So the, so the net change really came in on a sharp reduction in, in crop size. They lowered long grain production by 18.4 million hundredweight down to 104.1. And as we've been talking about, that's the smallest long grain crop since '93.

Dr. Hunter Biram 2:35

Over 30 years.

Scott Stiles 2:36

Right, right. So, you know, really the only net change to to supply was this was a smaller production. They made one demand adjustment. They lowered domestic use by 7 million down to 116 million hundredweight. Stocks were taken down to 1707 this month, so 11.4 reduction there. So on this tighter, on the tighter stocks, they did increase the price outlook for the 26th crop. They increased that from twelve dollars a hundredweight uh in June to 1350 in July. So it's you know, 1350, it's uh I think about six oh eight a bushel. So anyway, a better price outlook on the tighter stocks.

Dr. Hunter Biram 3:15

So we got better prices. We got a dollar fifty, a hundredweight improvement. And I mean, percentage-wise, what is that about 10, 15 percent? Somewhere in that neighborhood. Somewhere and about 10 percent. You know, and and normally that would be a good thing, right? I mean, I mean, corn, soybeans, cotton, I mean any of that. Like if we if we see a 10 plus percent increase, that should materialize into better returns. But you know, looking at the budgets, I'm not entirely sure that yeah, that's the case.

Scott Stiles 3:45

We still have to have some great yields. Uh, you know, we've been talking about needing, you know, 220 bushel yields or so to to break even in the typical share rent arrangement. So to see prices above six are encouraging, but at the same time, their costs have you know just continued to go up. We started the year at one price and then the the RAN conflict started, and then we saw prices kind of move to maybe 10% higher or something during the during the RAN conflict for the higher diesel and urea. So we had really hadn't seen any moderation in in production cost.

Dr. Hunter Biram 4:18

So what you're saying is just because we've got better prices doesn't mean that we need to be lax on our marketing. That's true. The marketing we still got to be diligent with. That's on new crop, and I mean, these contracts and these prices that we're talking about, I mean, is let's say a farmer's got some rice in the bin right now. I mean, would there would it be a good idea to take some, go ahead and take some now to the elevator?

Scott Stiles 4:39

Well, uh I mean that's a good point. I I mean it at some point this old crop rice has to move ahead of harvesting, but I think maybe growers are just kind of watching the market rally at this at this point. We are seeing, you know, some price improvement and it is partly tied to, you know, the tightening balance sheet here in the U.S. So I I think, you know, we may see some of this rice in storage kind of stay there until it has to move.

Dr. Hunter Biram 5:03

And so when you say has to move, that's pretty much when harvest comes along and they need to put the new crop in the bin, they'll take the old crop out.

Scott Stiles 5:09

And that'll be pretty soon because the harvest is going to start early, you know, this year. So that's uh so just over the next few weeks.

Dr. Hunter Biram 5:15

You know, one thing that we didn't talk about in the uh podcast that never happened uh was the crop progress. So I mean, what's the latest on crop progress for uh rice and all the other crops?

Scott Stiles 5:25

Well well the the crops, you know, probably a few weeks ahead of you know where it would normally be, given now, you know, how much of the crop we got planted in early this year. Well, I think we had probably ninety ninety percent of the rice crop planted by the first of May. So went, you know, went in fairly quick. And uh you know, corn harvest would be, you know, getting going well in in the southern end of the state in the first week of August probably. So it's crops moving along kind of at the 2012 type type speed that uh we saw that year that uh start to hear people, you know, going out there and trying to get some corn uh harvested in the first day or two of August. Wow. Maybe the last of July.

Dr. Hunter Biram 6:06

Wow. A July harvest. That sounds really early.

Scott Stiles 6:09

It's rare, but it's it's maybe the year for it. It could be. Yeah.

Dr. Hunter Biram 6:13

So then let's go into soybeans. Any takeaways on soybeans?

Scott Stiles 6:17

Main thing is keeping the stocks the same, 310 million, you know, on the new crop, ending stocks, and uh just not a lot of change. Uh there they there were uh uh you know a few acres added. It wasn't quite 700,000 acres added in the in in the June acreage report, pretty close to it. And um because of that, you know, they increased production 40 million bushels, but offset all that with lower carry and 10 million lower, you know, beginning stocks, and then a 30 million bushel increase in in exports. So with um, I think there's a little optimism there that, you know, if the trade deal works out as planned, you know, we see a little better export volume, uh, particularly to China, the new crop year. So and then of course we're seeing some good, you know, some daily sales announcements last week. We had nearly a, you know, a million metric tons of sales to new crop sales to China last week. It's nine nine hundred thousand metric tons. And um, so we're off to a good start with them. And uh so anyway, so I I think there's a little, you know, there's an encouraging signs at least that will exports will pick up with China.

Dr. Hunter Biram 7:26

Well, that's always welcome news. And I mean, g going into the growing season, that seemed to be what the market was telling farmers to grow at least from relative sense. I mean, relative prices for soybeans were way stronger than uh at least rice and and even to some extent corn. Because I mean, as you and I have talked about already, I mean, we've talked about crop prices and but there's also this expense side of things we know, we got the cost of inputs, and so you know, with soybeans, it's about a five hundred dollar an acre roughly crop to produce on probably a standard rental agreement. And and then for rice, it's probably a thousand plus.

Scott Stiles 8:00

Yeah.

Dr. Hunter Biram 8:00

And so given that the relative price of soybeans was stronger, given that the relative expense cost of production for soybeans is lower, I think Arkansas saw what more than a three million acre jump in acres. And I mean, I I saw that just driving here from Little Rock. It seems like soybeans are everywhere. Mm-hmm.

Scott Stiles 8:16

Yeah. Yeah, I think, you know, I forget the the number off the top of my head. Maybe we're back at 3.4 million right in that in that neighborhood. So, you know, that's what we've seen. And well, it's the highest increase of any state in the in the U.S. And and uh for those reasons that you mentioned, it's just the lower input cost. Soybean rally started in you know in January. It's been kind of trending higher all spring. And uh it just looked like the better marketing opportunities, lower input cost, uh, really pulled in a lot more acres.

Dr. Hunter Biram 8:45

And and Scott, one thing that we talked about in a former podcast was how soybeans are insulated to some extent from the Iran conflict. Can you talk about that a little bit?

Scott Stiles 8:56

Well, you know, uh urea was one of the inputs that really spiked and you know, that impacted um rice and corn and cotton budgets, but you know what that's one input that you know it's not in the soybean budget, so we didn't have to worry about the the urea cost impacting that. Of course the diesel did to some extent, but we just don't, you know, we don't have the irrigation cost in beans that we do in rice and and um so we didn't have as you know as much impact on the fuel side. But yeah, that's true. You know, that's uh I'd say, you know, rice probably and corn, you know, took the biggest hits from the Iran conflict.

Dr. Hunter Biram 9:30

So speaking of corn then, so we talk about rice and beans. Let's move into some takeaways for corn on the way.

Scott Stiles 9:35

Well, a little tighter balance sheet this month for corn, you know, we saw the the new crop stocks go from uh in June. The carryover was projected at $1.96 billion. Uh, they took that down $170 million uh in July to $1.79. So tighter stocks, but USDA didn't make any adjustments on their price outlook. They kept that at at $440 month to month. So really the big change there was um at lower carry-in, $125 just on uh some old crop adjustments and increased uh feed demand, some in the old crop balance sheet, and then they uh also increased the new crop exports by $50 million on they attribute it mostly to you know just better export prospects into into the European Union due to the due to the drought and uh and the impact it's having on the corn crop there.

Dr. Hunter Biram 10:25

So you talk about the EU. What what country is gonna be driving corn production in the EU?

Scott Stiles 10:30

Okay, so France is their their biggest corn producer, and um I mean the drought's been an issue there. We've you know, that's been discussed really for the at least the last for the past month. So USDA went ahead and lowered the EU corn production by 146 million bushels this month. Uh they increased their imports. Just roughly speaking, as i the imports it would be increased about 120 million bushels, that's all parts um. So uh you know, the US will get some of the import business by the EU and then it could be a a record corn crop in Argentina and and Brazil, so South America be or be competing with them again.

Dr. Hunter Biram 11:09

Yep, that seems to be the case anymore. Yeah uh anymore. Well, what about cotton? Let's end up with cotton.

Scott Stiles 11:14

Okay, they uh increased the harvested acres a little bit on cotton, uh I think up 160,000, uh due to you know, some additional acres, you know, the price rally that we saw, you know, we saw December futures go to as high as eighty-eight. That rally pulled in some more acres, so we saw acres increased in Georgia and Mississippi, so so USDA increased the acres 160,000 in July, increased the yield a little bit, six six pounds per acre, and that led to uh a four hundred thousand bale increase in production. And that went, you know, straight to ending stocks, increased that uh from three seven up to four point one million. So that was the only changes they made. It didn't make any demand changes, they just increased the crop four hundred thousand bales and left the price outlook the same at seventy-three cents.

Dr. Hunter Biram 12:03

So the price outlook is the same, but whenever the Iran conflict started, it seemed like in the futures market there were some pretty um pretty good prices. I mean, you mentioned what eighty-eight cents.

Scott Stiles 12:12

Yeah, you know, when we s you know, at the first of March, you know, kind of when they were doing uh during kind of midway through the survey for the March intentions, December futures were right around that sixty-nine cent level. And then and then the after, you know, the first of March, well, the prices started to run higher after the Iran conflict and oil started running higher. It ran toward, you know, $120 a barrel. So the synthetics were getting more expensive and and the fibers that compete, you know, the synthetics that compete with cotton. Cotton followed behind that. And um and eventually, you know, it got as high as eighty-eight cents by, you know, mid-May when I was still trying to we planted the bulk of the, you know, the bulk of this year's crop in May. So right at planting time, you know, we're seeing some, you know, prices we hadn't seen in two years. So 88 cents looked, you know, that looked good. And I think and it and it obviously pulled in some more acres in some states, Georgia and Mississippi in particular.

Dr. Hunter Biram 13:10

So well, Scott, I appreciate your patience with me this afternoon. I think I think that second episode was even better. I think it was even better. Uh, you know, that first one was just a nice conversation between two friends. So with that, everybody, I'm gonna go ahead and sign us off. Thank you for tuning in and stay tuned for the market report. Thank you.

Evan Ware 13:30

Back with your market report as of July 16th, 2026. Corn September futures are four dollars and forty-two cents per bushel. That's up four percent from a month ago and up nine percent from a year ago. Corn December futures are four dollars and sixty-four cents per bushel. That's up five percent from a month ago and up nine percent from a year ago. Rice September futures are fourteen dollars and two cents per hundred weight. That's up fifteen percent from a month ago and up eleven percent from a year ago. Rice November futures are fourteen dollars and thirty-eight cents per hundred weight. That's up fifteen percent from a month ago, and up eleven percent from a year ago. Soybean's November futures are eleven dollars and ninety-five cents per bushel. That's up four percent from a month ago and up seventeen percent from a year ago. Soybean's March 27 futures are $12.10 per bushel. That's up 4% from a month ago and up 17% from a year ago. Cotton December futures are 79.3 cents per pound. That's up 2% from a month ago and up 16% from a year ago. Cotton March 27 futures are 80.7 cents per pound. That's up 2% from a month ago and up 16% from a year ago. Wheat July 27 futures are $7.08 per bushel. That's up 19% from a month ago and up 18% from a year ago. The US weekly average for peanuts is currently $458 per ton. That's up 7% from a month ago, but down 8% from a year ago. Moving on to our fertilizer prices. Uria is currently $550 per ton. A month ago was $645 per ton. Three months ago was $850 per ton, and a year ago was $558 per ton. Ammonium nitrate is currently $554 per ton. A month ago was $575 per ton. Three months ago is also $575 per ton. And a year ago was $398 per ton. Ammonium sulfate is currently $500 per ton. A month ago is $534 per ton. Three months ago was $550 per ton. And a year ago was $540 per ton. DAP is currently about $915 per ton. A month ago was $898 per ton. Three months ago was $890 per ton. And a year ago was $828 per ton. Triple superphosphate is currently $795 per ton. Month ago was $795 per ton. Three months ago was $776 per ton. And a year ago was $715 per ton. Potash is currently $450 per ton. Month ago was $465 per ton. Three months ago is $457 per ton. And a year ago was $450 per ton. Arkansas Highway Diesel is currently about $4.55 per gallon. A month ago was $4.71 per gallon. And a year ago was $3.38 per gallon. Arkansas farm diesel is currently about $4.23 per gallon. A month ago was $3.37 per gallon, and a year ago was $2.59 per gallon. The Mississippi River at Memphis current reading is 15.57 feet. A year ago was 7.6 feet. Thanks for tuning in to another episode of Morning Coffee and Ag Markets. We hope that you have a great week.

Dr. Hunter Biram 16:45

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