October 16, 2023

USDA  DECREASES  ESTIMATED  2023 CROP  PRODUCTION

The monthly USDA World Supply and Demand Estimates (WASDE) Report that was released on October 12 will likely impact corn and soybean markets in the coming months. The WASDE Report decreased the estimated 2023 corn and soybean yield and the corresponding 2023 production estimates. There was a slight decrease in the expected U.S. corn ending stocks by the end of the 2023-24 marketing year, as compared to the September estimate; however, the projected soybean ending stocks for 2023-24 remained the same as a month earlier.

The latest WASDE report showed an increase in total demand levels for corn during the 2023-24 marketing year, as compared to 2022-23 levels. Total corn usage for 2023-24 is now estimated at 14.34 billion bushels, which is down slightly from the September estimate and compares to total corn usage of nearly 13.77 billion bushels for 2022-23. The increased corn usage estimates are mainly due to a projected increase in corn export levels and corn used for ethanol production in the coming year. The total 2023-24 soybean usage is estimated at 4.18 billion bushels which is down from 2022-23 levels, mainly due to a projected decrease in export levels.

The October WASDE Report showed a slight decrease the estimated U.S. corn ending stocks for the 2023-24 marketing year, as compared to the September report. The 2023-24 corn ending stocks are now estimated at 2.11 billion bushels which compares to 1.36 billion bushels for 2022-23. It also compares to previous year-end corn carryout levels of 1.38 billion bushels in 2021-22, 1.23 billion bushels in 2020-21, and 1.99 billion bushels in 2019-20. The 2023-24 U.S. corn ending stocks-to-use ratio is now estimated at 14.7 percent, compared to the much tighter ratios of ratios of 9.9 percent in 2022-23, 9.2 percent in 2021-22, and 8.3 percent for 2020-21. The projected 2023-24 ratio is comparable to the ratios of 14.4 percent in 2019-20 and 15.5 percent for 2018-19. The wider stocks-to-use ratio may limit the potential for rallies in the cash corn market in the coming months.

The 2023-24 U.S. soybean ending stocks in the latest WASDE Report were estimated at 220 million bushels, which is the same as the September USDA report. The projected 2023-24 carryover level is lower than the estimated final ending stocks of 268 million bushels in 2022-23 and 274 million bushels in 2021-22, as well as considerably below some other recent carryover levels of 523 million bushels in 2019-20 and 909 million bushels in 2018-19. The U.S. soybean ending stocks-to-use ratio for 2023-24 is estimated at 5.3 percent, which remains at a fairly tight level. The 2023-24 projected ending stocks  ratio compares to 6.2 percent for 2022-23, 6.1 percent for 2021-22 and 5.7 percent for 2020-21; however, the 2023-24 ratio would be well below the ratios 13.2 percent ratio for 2019-20 and nearly 23 percent for 2018-19. The expected tight degree of projected soybean ending stocks for 2023-24 will likely help support short-term soybean prices in the coming months; however, continued market strength may depend on 2024 South American soybean production and continued solid export markets.

USDA is estimating the U.S farm-level cash corn price for 2023-24 at an average of $4.95 per bushel, which was up $.05 per bushel from the September estimate. The 2023-24 USDA price estimate is the expected average farmlevel price for the 2023 crop from September 1, 2023, through August 31, 2024; however, this does not represent estimated prices for either the 2023 or 2024 calendar year. The projected 2023-24 average corn price compares to final market-year average corn prices of $6.54 per bushel for 2022-23, $6.00 per bushel for 2021-22, $4.53 per bushel for 2020-21, $3.56 per bushel for 2019-20, and $3.61 per bushel for 2018-19.

USDA is projecting the U.S. average farm-level soybean price for the 2023-2024 marketing year at $12.90 per bushel, which is the same as the September estimate.  The 2023-24 soybean price estimate compares to the estimated 2022-23 average price of $14.20 per bushel, would was the highest average price in several years. Other final market-year average soybean prices were $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.

USDA Lowers 2023 Corn and Soybean Yield Estimates

The monthly USDA Crop Production Report was also released on October 12. USDA reduced the expected 2023 national average corn yield by eight-tenths of a bushel and decreased the projected 2023 U.S. average soybean yield by five-tenths of a bushel per acre as compared to the September report. The latest estimated 2023 national corn yield is only four-tenths of a bushel per acre lower than the final 2022 average yield, while the projected U.S. average soybean yield for 2023 is the same as the final 2022 national soybean yield.

USDA is estimating the 2023 national average corn yield at 173 bushels per acre, which compares to 173.4 bushels per acre in 2022. The projected 2023 U.S. corn yield also compares to the record U.S. corn yield of 176.7 bushels per acre in 2021, 171.4 bushels per acre in 2020, and 168 bushels per acre in 2019. The estimated 2023 U.S. harvested corn acreage is 87.1 million acres, which is well above the 79.1 million acres that were harvested last year. The latest USDA Report estimated the total U.S. corn production for 2023 at just over 15 billion bushels, which is almost 10 percent above the production level of 13.71 billion bushels in 2022. The anticipated 2023 corn production would be the third highest on record and compares to levels of 15.1 billion bushels in 2021, 14.1 billion bushels in 2020, and the record U.S. production of 15.15 billion bushels in 2016.

USDA is estimating 2032 U.S. soybean yield at 49.6 bushels per acre, which compares to 50.1 bushels per acre in 2022, 51.7 bushels per acre in 2021, 51 bushels per acre in 2020, 47.4 bushels per acre in 2019, and the record U.S. soybean yield of 52.0 bushels per acre in 2016. The harvested soybean acreage for 2023 is estimated at 82.8 million acres, which is down from 86.2 million acres in 2022 and 86.3 million acres in 2021; however, it is similar to the 82.6 million harvested acres in 2020. The USDA Report estimated 2023 U.S. soybean production at just over 4.1 billion bushels, which trails the production levels of 4.27 billion bushels in 2022, 4.46 billion bushels in 2021, and 4.22 billion bushels in 2020.

The October USDA Report increased the expected 2023 corn yield in some States and lowered yield expectations in other States, compared to the September Report. Minnesota is projected to have a 2023 corn yield of 179 bushels, which compares to the state record yield of 195 bushels per acre in 2022, 177 bushels per acre in 2021, and 191 bushels per acre in 2020. USDA is estimating the 2023 Iowa corn yield at 199 bushels per acre, which compares to 200 bushels per acre in 2022 and the state record yield of 204 bushels per acre in 2021. States with projected strong average corn yields for 2023 include Illinois at 200 bushels per acre, which compares to record corn yield of 214 bushels per acre in 2022; Indiana at 197 bushels per acre, compared to 190 bushels per acre in 2022; and Ohio at 195 bushels per acre, compared to 187 bushels per acre in 2022. States with more modest corn yield estimates for 2023 include Nebraska at 174 bushels per acre, compared to 165 bushels per acre in 2022; South Dakota at 147 bushels per acre, compared to 132 bushels per acre in 2022; North Dakota at 136 bushels per acre, compared to 131 bushels per acre in 2022; and Wisconsin at 165 bushels per acre, compared to 180 bushels per acre in 2022.

USDA is estimating the 2023 Minnesota soybean yield at 48 bushels per acre, which compares to 50 bushels per acre in 2022, 47 bushels per acre in 2021, and the record yield of 52.5 bushels per acre in 2016. Iowa is projected to have a 2023 soybean yield of 58 bushels per acre, compared to 58.5 bushels per acre in 2022 and the record yield of 63 bushels per acre in 2021. Other States with solid projected soybean yields for 2023 include Illinois at 61 bushels per acre, compared to 63 bushels per acre in 2022 and the record yield of 65 bushels per acre in 2021; Indiana at 61 bushels per acre, compared to 57.5 bushels per acre in 2022; Ohio at 57 bushels per acre, compared to 55.5 bushels per acre in 2022; and Nebraska at 54 bushels per acre, compared to 49 bushels per acre in 2022. Projected 2023 soybean yields in other upper Midwest States include South Dakota at 43 bushels per acre, compared to 38 bushels per acre in 2022; North Dakota at 33 bushels per acre, compared to 35 bushels per acre in 2022, and Wisconsin at 44 bushels per acre, compared to 54 bushels per acre in 2022,

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Note — For additional information contact Kent Thiesse, Farm Management Analyst and Sr. Vice President,

MinnStar Bank, Lake Crystal, MN.  (Phone — (507) 381-7960)

E-mail — kent.thiesse@minnstarbank.com)  Web Site — http://www.minnstarbank.com/