LAKE CRYSTAL, Minn. — USDA has released some key reports in the past few weeks that are likely to impact corn and soybean market prices in the coming months. The USDA Crop Acreage Report and the Quarterly Grain Stocks Report were released on June 30, which was followed by the World Supply and Demand (WASDE) Report that was released on July 12.
The June 30 USDA crop acreage report data showed a significant increase in planted corn acres and a rather large drop in anticipated soybean acreage for 2023, compared to the planting intentions report in March of this year. The result was an immediate increase in soybean futures prices on the Chicago Board of Trade (CBOT) and a decline in corn futures prices.
The WASDE report factored in the changes in 2023 crop acreage, as well as made some adjustments to estimated 2023 crop yields and ending stocks. The WASDE report was generally viewed as “bearish” on future commodity prices, especially for corn. Both corn and soybean futures prices were down sharply initially following the release of the WASDE report; however, the prices rebounded rather quickly, due to continuing drought conditions in many portions of the Corn Belt.
Summary of June 30 USDA Crop Acreage Report and July 12 WASDE Report:
Corn
The June 30 crop acreage report increased the estimated U.S. planted corn acreage in 2023 to just over 94 million acres, which was an increase of 2.1 million acres from the planting intentions report in March and was over 2.2 million acres above the average grain trade expectations. The 2023 corn acreage projection is over 5.5 million acres above the 2022 corn acreage and would be the highest level of planted corn acres in the U.S. since 1941. As expected, USDA did lower the estimated 2023 U.S. average corn yield by 4 bushels per acre in the July WASDE report to 177.5 bushels per acre, which compares to 181.5 bushels per acre in June and a final average corn yield of 173.3 bushel per acre in 2022.
Even with the fairly significant reduction in the expected 2023 average corn yield total estimated corn production stayed almost steady with a month earlier at the record level of 15.32 billion bushels. The 2023 total U.S. corn production compares to 13.77 billion bushels in 2022, 15.1 billion bushels in 2021, 14.1 billion bushels in 2020, and 13.6 billion bushels in 2019. The total corn usage for 2023-24 is estimated at 14.48 billion bushels, which would be an increase from the estimated total corn usage of just 13.73 billion bushels for 2022-23.
Based on the July 12 WASDE report, USDA is projecting that 2023-24 corn ending stocks to increase to 2.26 billion bushels by August 31, 2024, which would be an increase of 860 million bushels from the estimated carryover level just over 1.4 billion bushels for 2022-23. The estimated corn ending stocks for 2022-23 were decreased by 49 million bushels from the June report. The current projected corn carryover levels compare to corn ending stocks of 1.38 billion bushels in 2021-22, 1.24 billion bushels in 2020-21, and 1.92 billion bushels in 2019-20. The projected U.S. corn supply for the balance of the 2022-23 marketing year remains fairly tight, which is likely to maintain support for day-to-day cash corn prices; however, the premium for “old crop” corn prices will likely start to diminish as we get closer to the 2023 corn harvest season.
USDA is now projecting 2023-24 market year average (MYA) corn price at $4.80 per bushel, which is the same as the June report but would be a decrease of $1.80 per bushel from the estimated 2022-23 estimated MYA price of $6.60 per bushel. The marketing year for the 2023 crop year will extend from September 1, 2023, through August 31, 2024. The current MYA corn price projections compare to other recent MYA prices of $6.00 per bushel in 2021-22, $4.53 per bushel in 2020-21, $3.56 per bushel in 2019-20, and $3.61 per bushel in 2018-19.
Soybeans
The estimated 2023 U.S. soybean acreage in the June 30th crop acreage report of 83.5 million acre was a decrease of 4 million acres from the March planting intentions, which was well below the 2022 and 2021 soybean acreage of 87.5 million acres and 87.2 million acres, respectively. The record U.S. soybean planted acreage was 90.2 million acres in 2017. The July 12th WASDE report projected a U.S. average soybean yield of 52 bushels per acre in 2023, which was unchanged from the June report is an increase from the final 2022 average soybean yield of 49.5 bushels per acre. Total U.S soybean production for 2023 is now estimated at just over 4.3 billion bushels, which would be a slight increase from the U.S. soybean production of just over 4.27 billion bushels in 2022. The record U.S. soybean production was 4.54 billion bushels in 2018.
USDA is now estimating soybean ending stocks at the end of the 2023-24 marketing year to be at 300 million bushels, which is down 50 million bushels from the June estimate. The 2023-24 carryover level compares to the estimated soybean ending stocks of 255 million bushels for 2022-23, 274 million bushels in 2021-22, and 257 million bushels in 2020-21. USDA is projecting total soybean usage for 2023-24 at just over 4.27 billion bushels, which would be down slightly from final usage estimated for 2022-23. The latest WASDE report projected a reduction of 130 million bushels in soybean export levels for 2023-24 compared to a year earlier.
USDA is estimating the national MYA soybean price for the 2023-24 marketing year at $12.40 per bushel, which is an increase of $.30 per bushel from the June WASDE report. The 2023-24 soybean MYA price would be $1.80 per bushel lower than the estimated soybean MYA price of $14.20 per bushel for the 2022-23 marketing year, which ends on August 31, 2023. The current soybean MYA price projections compare to other recent final MYA prices of $13.30 per bushel in 2021-22, $10.80 per bushel in 2020-21, and $8.57 per bushel in 2019-20.
Wheat
Based on the July WASDE report. total U.S. wheat production for 2023 was listed at 1.74 billion bushels, which was an increase of 74 million bushels from the June report. The latest WASDE report estimated the U.S. average wheat yield for 2023 at 46.1 bushels per acre, which was an increase of 1.2 bushels per acre from the June report.
The 2023-24 wheat ending stocks are projected at 592 million bushels, which compares to 580 million bushels in 2022-23, 660 million bushels in 2021-22 and 845 million bushels in 2020-21. The 2023-24 marketing year for wheat runs from June 1, 2023, through May 31, 2024. The 2023-24 MYA wheat price is currently projected at $7.50 per bushel, which compares to other recent prices of $8.83 per bushel for 2022-23, $7.63 in 2021-22, $5.05 per bushel in 2020-21, $4.58 per bushel in 2019-20, and $5.16 per bushel in 2018-19.
Summary
There are still a lot of questions yet to be answered regarding both the supply and demand figures for 2023-24 in future WASDE reports. Based on the continuing drought conditions that appear to be persisting across much of the Corn Belt in mid-July, weather forecasts and crop production potential will likely be weighing heavily on the marketing decisions of grain traders in the coming weeks. This could result in a high level of volatility in commodity markets in the coming weeks, depending on day-to-day weather forecasts.
Some private analysts feel that the final 2023 U.S. corn and soybean yields may be over-estimated by USDA, especially if drought conditions continue to expand and worsen in some portions of the Midwest. The combination of the overall U.S. world economy and political unrest in parts of the world also raises questions with regards to future corn and soybean demand, especially for export markets. Corn and soybean export levels have remained quite solid in the past couple of years, even with the higher commodity price levels, due to concerns over world grain supplies.
— Kent Thiesse, Farm Management Analyst and Senior Vice President, MinnStar Bank
