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The USDA World Agricultural Supply and Demand Estimates (WASDE) Report released on May 12 projected record production levels in 2023 and a likely increase in corn and soybean ending stocks by the end the 2022-23 marketing year on August 31, 2024. U.S. wheat stocks are expected to show in slight decrease in the coming year. From a grain marketing standpoint, the initial reaction to the WASDE report was widely regarded as somewhat “bearish” for corn and soybeans and mainly neutral for wheat. USDA is projecting that the national average grain prices for both corn and soybeans will decline by nearly $2.00 per bushel for the 2023-24 marketing year, compared to 2022-23 price levels. Following are some highlights of the latest USDA WASDE Report:
Based on the May 12 USDA WASDE Report, the projected corn ending stocks for the 2022-23 marketing year are estimated at 1.417 billion bushels, which is an increase of 75 million bushels from the April Report, due to an expected reduction in corn exports of 75 million bushels. The anticipated 2022-23 corn ending stocks are an increase from 1.377 billion bushels in 2021-22 and 1.235 billion bushels in 2020-21. USDA is projecting that total U.S. corn usage for 2022-2023 13.73 billion bushels for livestock feed, ethanol, exports, etc., which is a decrease of 1.23 billion bushels or almost 9 percent compared to the 2021-22 usage level. The much lower estimated corn usage was mainly due to a rather large decrease in the estimated amount of corn used for feed in 2022-23, as well as significantly lower corn export levels, compared to a year earlier. The 2022-23 corn stock-to-use ratio is now estimated at 10.3 percent, up from 9.2 percent in 2021-22; however, the ratio remains quite tight.
The May WASDE Report also offered an initial USDA estimate for corn carryover levels in the 2023-24 marketing year, which ends on August 31, 2024. The corn ending stocks were estimated at 2.22 billion bushels, which would be an increase of 805 million bushels or 57 percent compared to the end of the 2022-23 marketing year. The 2023-24 stocks-to-use ratio is expected to increase to 15.3 percent. The projected 2023-24 ending stocks were well above the average grain-trade estimates and the carryout level would be the highest since the end of the 2016-17 marketing year. USDA is estimating the total corn supply for 2023-24 to increase by 1.56 billion bushels to just over 16.7 billion bushels, while the total corn usage for the year is only expected to increase by 755 million bushels to just over 14.48 billion bushels. USDA is forecasting increased corn usage for livestock feed and higher U.S. corn export levels in 2023-24, as well as a slight increase in usage for ethanol production.
USDA is estimating total U.S. corn production in 2023 at the record level of 15.265 billion bushels, which would be an increase of approximately 11.2 percent from the total 2022 U.S. corn production. The USDA Report expects an estimated 92 million acres of corn to be planted in the U.S. in 2023, which compares to 88.6 million acres in 2022 and 93.3 million acres in 2021. USDA is projecting the average U.S. corn yield at 181.5 bushels per acre in 2023, which is up from the average yields of 173.3 bushels per acre in 2022 and 176.7 bushels per acre in 2021. The WASDE corn yield estimate is very close to the trendline corn yield forecast at the USDA Ag Outlook Conference in February this year. Corn planting progress in 2023 has been running ahead of normal in many areas of the central and southern Corn Belt of the U.S. but is behind normal in some areas of the northern Corn Belt.
As of May 12, USDA is estimating the average U.S “on-farm” corn price for the 2022-23 marketing at $6.60 per bushel, which was the same as the April estimate. The current USDA projected corn price compares to recent final national average prices of $6.00 per bushel for 2021-22, $4.53 per bushel for 2020-21, and $3.56 per bushel for 2019-20. USDA also released the first estimated average corn price for the 2023-24 marketing year at $4.80 per bushel, which would be $1.80 per bushel lower than the estimated 2022-23 average price and $1.20 per bushel below the final 2021-22 national average price.
According to the May 12 WASDE Report, the projected soybean ending stocks for 2022-23 are estimated at 215 million bushels, which is up by 5 million bushels from the April estimate and was very close to the average grain trade estimates. The projected 2022-23 U.S. soybean ending stocks remain very tight and compare to other recent soybean carryover levels of 274 million bushels in 2021-22, 257 million bushels in 2020-21, 525 million bushels in 2019-20, and a whopping 909 million bushels in 2018-19.
Total soybean usage for 2022-23 is estimated to be just over 4.35 billion bushels, which is down slightly from the total usage of 4.465 billion bushels in 2021-22. Soybean export levels for 2022-23 are projected to decrease slightly compared to a year earlier; however, soybean sales to China have remained strong. USDA projected a slight increase in bushels used for soybean processing in the U.S for 2022-23 compared to crush levels a year earlier. Some analysts feel that domestic soybean demand may increase in the next few years with several new or expanded soybean processing plants scheduled to come on board, focusing on the production of renewable diesel.
The May WASDE Report projects soybean ending stocks to increase by 120 million bushels to 335 million bushels by the end of the 2023-24 marketing year on August 31, 2024. USDA is estimating the total U.S. soybean supply to increase by 175 million bushels in 2023-24; however, the total soybean usage is only expected to increase by 56 million bushels compared to levels for 2022-23. The projected ending soybean stocks-to-use ratio for 2023-24 is estimated at 7.6 percent, which compares to 4.9 percent in 2022-23 and 6.1 percent in 2021-22.
Total U.S. soybean production in 2023 is estimated at the record level of 4.51 billion bushels, which would be an increase from the estimated U.S. soybean production of 4.276 billion bushels in 2022 and just over 4.46 billion bushels in 2021. Interestingly, a year ago in May USDA projected the 2022 U.S. soybean production at 4.64 billion bushels and the actual 2022 production was 364 million bushels less. Planted soybean acres for 2023 are projected at 87.5 million acres, which is the same as 2022 and just above 2021 soybean acreage. USDA is estimating a national average soybean yield of 52 bushels per acre in 2023, which compares to 49.5 bushels per acre in 2022 and 51.7 bushels per acre in 2021. The record U.S. soybean yield was 52.1 bushels per acre in 2016.
USDA is estimating the U.S “on-farm” soybean average price at $12.10 per bushel for the 2023-24 marketing year, which runs from September 1, 2023 to August 31, 2024. The preliminary price estimate for the 2023-24 marketing year on May 1 would be a decline of $2.10 per bushel from the 2022-23 average price and $1.20 per bushel below the final 2021-22 average price. The projected final market year average price for 2022-23 is $14.20 per bushel soybean price, which compares to final average soybean prices of $13.30 per bushel for 2021-22, $10.80 per bushel for 2020-21, $8.57 per bushel for 2019-20, and $8.48 per bushel in 2018-19. Average soybean prices for 2023-24 will likely be highly dependent on 2023 soybean production in the U.S., as well as increases in soybean crush levels and the amount of U.S. soybean exports to China and other countries.
The May 12 WASDE Report projected U.S. wheat ending stocks to decline to 556 million bushels by the end of the 2023-24 marketing year on May 31, 2023. This compares to estimated ending stocks of 598 million bushels for 2022-23 and 698 million bushels in 2021-22. Wheat demand in 2023-24 is projected to decrease slightly from the current year demand, down to 1.837 million bushels, with the decline mainly due to lower export estimates. Wheat acreage in 2023 is expected to increase to 49.9 million acres and total U.S. wheat production is expected to increase slightly in 2023 to 1.66 billion bushels. Wheat acreage and production numbers could be adjusted downward in coming months, due to planting delays in the primary spring wheat production region. USDA is projecting the average “on-farm” wheat price at $8.85 per bushel for 2022-23 and $8.00 per bushel for 2023-24, which compares to final national average price of $7.63 per bushel in 2021-22 and $5.05 per bushel in 2020-21.
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