Ag Retail Sales: Large Ag Down Double Digits, Inventories Mixed

Jul 11, 2024

Large Ag unit retail sales were down 14.6% year/year, with declines in Row Crop and Combines more than offsetting a very slight increase in 4WDs. Combined US/Canada large Ag unit sales -14.6% year/year in May (-6.1% in May). By category, row crop -12.3%, 4WD tractors +0.8%, combines -28.7%. U.S. dealer inventories down 15.4% year/year in 2WD tractors, +61.1% in 4WD tractors, and down 17.9% in combines; inventories remain the key item to watch, we remain encouraged by early signs of progress particularly in Small Ag and Combines.

US and Canada large tractor and combine unit retail sales were down 14.6% year/year in June (May -6.1%, April +12.8%, March -3.1%, February -7.9%, January -13.9%). US large ag sales were down 16.1% following a 6.7% decline in May; Canada sales fell 5.7% following a 3.3% decline in May.
- US sales: row crop tractors -13.9%, 4WD tractors -1.3%, combines -31.0%.
- Canada sales: row crop tractors -0.3%, 4WD tractors +10.6%, combines -20.8%
4WD tractor sales +0.8% year/year in June following +5.5% in May; June L3M sales +10.2% year/year vs. +8.0% in May.
- US dealer inventories of 4WD tractors +61.1% year/year in May, the 19^th consecutive increase. On a days-sales basis, inventories up year/year in May to 65 (May 2023: 47) and up sequentially (April: 63), though remaining below pre-Covid days/sales. June typically a below-average month of the year for 4WD tractor sales, averaging 6.5% of annual sales the last five years.
Row crop tractor sales -12.3% year/year in June following -8.1% in May; May L3M sales -3.6% vs. +1.6% in May.
- US row crop tractor inventories +19.1% year/year in May. On a days-sales basis, inventories up year/year in May at 166 (May 2023: 139) and up sequentially (April: 157). June typically an average month of the year for row crop tractor sales, averaging 7.9% of annual sales the last five years.
Combine sales -28.7% year/year in June following a 4.6% decline in May; June L3M sales -5.3% vs. -1.1% in May.
- US combine inventories -17.9% year/year in May, the second consecutive decline. On a days-sales basis, inventories down year/year in May to 80 (May 2023: 83) though up sequentially (April: 69). June typically an average month of the year for combine sales, averaging 8.5% of annual sales the last five years.
Mid-range tractor sales -11.6% year/year in June (May -12.0%, April -5.7%) while compact tractor sales were -19.3% year/year (May -11.9%, April -4.9%). June an above-average month for mid-range tractors (averaging 9.9% of annual sales) and compact tractors (averaging 11.1% of annual sales).

Source : Farm Equipment

Video: Will the 2025 USDA December Crop Report Be a Market Mover/Surprise?

Historically, the USDA December crop report is a non-event or another dud report as the USDA reserves any final supply changes to the final report in January of the following year in this case 2026. But after the longest U.S. government shutdown in history at 43 days and no October crop report will they provide more data/surprise and make an exception?
Our China U.S. soybean purchase tracker is now at 26.6% or a total of 3.2 mmt but for traders it’s taking too long to unfold.
The final Stats Canada production report was bearish canola and wheat projection a record crop in both (it adds to the global glut of supplies) and bullish local corn and soybean prices in Ontario/Quebec thanks to a drought. It will not help the fund flow short-term, the USDA may need to offset it?
A U.S. Fed interest rate cut of another 25-basis point next Wednesday (probability 87.1%) could help fund flow and sentiment in stock and ag commodities into year end.
More inflows into Bitcoin this past week saw prices rebound back above 90,000 with support at 82,000 and resistance at 96,000.
A V-shaped bottom in cattle suggest the lows are in after Mexico reported another new world screwworm case. Lower weights, seasonal demand and higher U.S. beef select/choice values with a continued closure of the Mexican border to cattle will result in a resumption of higher cattle futures into yearend.
Australia is expected to produce its 3rd largest wheat crop ever at 36 mmt adding to the global glut of supplies.
Reports of ASF in hogs in Spain the largest pork exporter in Europe could see the U.S. win more pork export business long-term.
If the rains verify into next week of 3-5 inches for Brazil it would go a long way to fixing the dry regions from the last 2-months, but the European weather model has been wrong for the past 2-months!
Natural gas futures are surging to the 3rd price count as frigid hold temps set in.
CDN $ is also surging to end the week on a very resilient economy and better employment numbers suggesting no interest rate cuts next week.
Finally, the CFTC report showed funds were net buyers of soybeans but sellers of corn, canola and wheat. In real time the funds have gone back to selling as they take some profits.