USDA Lowers Corn and Soybean Production and Ending Stocks
October 13, 2023
USDA on Thursday slightly lowered U.S. crop production for corn and soybeans and brought down projected ending stocks for both crops as well.
USDA lowered the 2023-24 corn production 70 million bushels (mb) to 15.064 billion bushels (bb) while also lowering soybean production 42 mb to 4.104 bb. Both numbers were within the pre-report ranges.
According to DTN Lead Analyst Todd Hultman, Thursday's new-crop U.S. ending stocks estimates were neutral for corn, soybeans and wheat. Hultman sees the world ending stocks estimates from USDA as neutral for corn and wheat, but bullish for soybeans.
Stay tuned throughout the morning and refresh this page often as we will be sending a series of updates with the important highlights from today's reports, including commentary from our analysts.
USDA brought down the 2023-24 crop by lowering the yield estimate .8 bushels per acre (bpa) to 173 bpa.
Production for the 2023-24 corn crop was lowered 70 mb to 15.064 bb as a result. USDA held pat on harvested acres at 87.1 million acres.
Ending stocks for the 2023-24 crop were lowered 110 mb to 2.111 bb.
USDA also lowered the carryover old-crop ending stocks by 91 mb essentially dropping the new-crop beginning stocks to 1.361 bb.
On the demand side, USDA lowered Feed and Residual use 25 mb to 5.6 bb. Total 2023-24 Food, Seed and Industrial use at 6.715 bb. Ethanol use was held at 5.3 bb. Total domestic use is forecast at 12.315 bb, down 25 mb.
Exports for the new crop also were also dropped 25 mb to 2.025 bb.
The farmgate price for the 2023-24 crop is projected at $4.95 a bushel, a five-cent increase from last month.
Globally, beginning stocks for the 2023-24 new crop were lowered 1.34 million metric tons (mmt) to 298.13 mmt. Production globally was increased slightly to 1,214.47 mmt. Global exports were bumped up slightly to 196.25 mmt. Global ending stocks for the new crop are forecast at 312.4 mmt, down 1.59 mmt.
Ukraine's production was held pat at 28 mmt and Ukraine's exports were held steady at 19.5 mmt.
Looking at global 2022-23 crop, Brazil's production was held at 137 mmt and exports were held pat at 57 mmt. Argentina's production was held at 34 mmt and Argentina's exports were held pat at 23 mmt.
USDA forecast soybean production at 4.10 bb, which is toward the low end of pre-report expectation and reflects downward adjustments to the national average yield. USDA's October estimate of 49.6 bpa is 0.5 bushel lower than last month.
Ending stocks for 2023-24 were left unchanged from last month at 220 mb but adjustments were made in many demand categories. USDA incorporated the lower production estimates, increased the crush estimate by 10 mb, cut exports by 35 mb and raised the residual estimate by 2 mb. The national average farm gate price was left unchanged at $12.90 per bushel.
Globally, USDA trimmed 2023-24 ending stocks by 3.63 mmt to 115.62 mmt, below the range of pre-report expectations. The decline came from lower beginning stocks, lower production and slightly higher crush. USDA's early estimate soybean production in Argentina and Brazil are 48 mmt and 163 mmt, respectively.
U.S. wheat production was estimated at 1.812 bb in October, up from USDA's September estimate of 1.734 bb. Ending stocks were estimated at 670 mb, an increase from 615 mb in September.
Wheat exports were pegged at 700 mb, unchanged from September. USDA estimates the farmgate price of wheat at $7.30, a decrease from $7.50 in September.
World ending stocks were estimated at 258.13 mmt, a decrease from 258.61 mmt in September.
Global wheat production was pegged at 783.43 mmt, an increase from 787.34 mmt in September.
Wheat production in Russia was estimated at 85 mmt, unchanged from September's estimate.
Ukraine wheat exports is left unchanged at 11.0 mmt. USDA estimates Ukraine production at 22.5 mmt, also unchanged from last month.
Australia's wheat production was pegged at 24.5 mmt in October, a drop from 26 mmt last month. Production in Argentina was estimated at 16.5 mmt, unchanged from September.
Thursday's WASDE report wasn't as supportive as cattle producers would have hoped. Beef production for 2023 was raised by 35 million pounds due to higher cow and bull slaughter in the second half of the year, which more than offsets the weaker fed-cattle slaughter. But USDA did state that, "the increase in total slaughter is partially offset by lower dressed weights," which I raise question to, because as of last week's most recent slaughter data, carcass weights are the second highest they've been in history, behind only 2022 by 1 or 2 pounds.
Regarding quarter price projections, prices were slightly decreased from a month ago due to recent price trends. The third quarter of 2023 is now expected to average $184.27, which is $0.27 higher than last month, but the fourth quarter of 2023 is now expected to average $185.00, which is $5.00 less than a month ago. For 2024, the first quarter is now expected to average $187, which is $1.00 less than last month, and the second quarter of 2024 is now expected to average $185 which is $1.00 lower than last month's projection.
Beef imports for 2023 were increased by 70 million pounds, and 2023 beef exports were decreased by 20 million pounds.
Thursday's WASDE report shared mixed news for the hog and pork markets. Pork production for 2023 was raised by 130 million pounds as slaughter speeds in the second half have increased and based on the revisions to the first half of the 2023 pig crop.
In terms of quarterly price projections, the third quarter of 2023 is expected to average $69.27, which is down $0.27 from last month's projection, and the fourth quarter of 2023 is now expected to average $58.00 which is $1.00 lower than last month's report. For 2024 hog prices in the first quarter are expected to average $59.90, which is $2.30 lower than last month's projection, and second quarter prices for 2024 are expected to average $59.70, which is $0.20 cheaper than last month's projection.
Pork imports for 2023 were raised by 25 million pounds, and 2023 pork exports were decreased by 125 million pounds.