November 13, 2023
USDA ISSUES A SURPRISING WASDE REPORT
The monthly USDA World Supply and Demand Estimates (WASDE) Report that was released on November 9 was a bit of a surprise to grain traders and may impact corn and soybean markets in the coming weeks. The WASDE Report raised 2023 corn and soybean production estimates, based on increases in the expected final U.S. crop yields for 2023. However, the report made smaller adjustments to projected 2023-24 carryover estimates at the end of the current marketing year on August 31, 2024, due to some projected increases in grain usage during the current marketing year. The biggest surprise to the grain markets was the rather large increase in the estimated 2023 U.S. average corn yield in in the November USDA report compared to the October estimate and the corresponding increase in the total production level.
There was an immediate negative grain market reaction for both corn and soybeans following the release of the November WASDE Report. Most grain marketing analysts viewed the latest report as “quite bearish” for future corn prices and “neutral” to “somewhat bearish” for soybean prices. December corn futures closed at $4.68 per bushel on the Chicago Board of Trade (CBOT) following the November 9 report, which compares to a price of $4.76 per bushel following the WASDE report on September 12 and to $6.64 per bushel and $5.55 per bushel, respectively, following the November WASDE reports in 2022 and 2021. November soybean futures closed at $13.43 per bushel following the latest WASDE report, which was above the $12.90 per bushel price following the September report and compares to $14.52 per bushel following the WASDE report in November of 2022.
The 2023 national average corn yield is now estimated at the record level of 174.9 bushels per acre, which was increased from 173 bushels per acre in October. The 2023 harvested corn acreage in the U.S. was maintained 87.1 million acres, resulting in an estimated record total U.S. corn production of 15.234 billion bushels for 2023. This compares to total U.S. corn production levels of just over 13.7 billion bushels in 2022, near 15.1 billion bushels in 2021, and 14.1 billion bushels in 2020. Total corn usage for the 2023-24 marketing year is now estimated at just over 14.46 billion bushels, which would be up from nearly13.77 billion bushels in the 2022-23 marketing year. The amount of corn used for feed and ethanol production, as well as for exports, are all expected to increase during the current marketing year that ends on August 31, 2024, as compared to a year earlier.
USDA is now estimating 2023-2024 U.S. corn ending stocks at just over 2.15 billion bushels, which was 26 million bushels above the October estimate. This compares to previous carryout levels of just over 1.36 billion bushels in 2022-23, nearly 1.34 billion bushels in 2021-22, and 1.24 billion bushels in 2020-21. Based on current estimates, the U.S. corn carryout to use ratio would be at 14.9 percent for 2023-24, which compares to previous levels of 9.9 percent for 2022-23, 9.2 percent for 2021-22, and 8.3 percent in 2020-21. The increased level of corn supply could limit the potential for substantial rallies in the cash corn market in the coming months.
Total U.S. soybean production for 2023 was estimated at just under 4.13 billion bushels in the November report, which was increased by 26 million bushels from the October estimate and was slightly higher than the average grain trade projection. Total soybean demand for 2023-24 is projected at just over 4.18 billion bushels, which is down from 4.3 billion bushels in 2022-23, primarily due to a decrease in the expected soybean export level. The 2022-23 U.S. soybean ending stocks in the recent WASDE Report were estimated at 245 million bushels, which was an increase of 25 million bushels compared to the October USDA report. The projected soybean ending stocks compare to 268 million bushels in 2022-23, 274 million bushels in 2021-22 and 256 million bushels in 2020-21. The projected 2023-24 carryout level is still well below the very high ending stocks of 523 million bushels in 2019-20 and 913 million bushels in 2018-19. The soybean stocks-to-use ratio for 2023-24 is estimated at 5.9 percent, which is down from down from 6.2 percent on 2022-23 and is far lower than the levels of 11.5 percent in 2019-20 and 23 percent for 2018-19.
Based on the November WASDE report, USDA is currently estimating the U.S average on-farm cash corn price for the 2023-2024 marketing year at $4.85 per bushel, which was down $.10 per bushel from the October report. The USDA marketing year price estimates are the expected average farm-level prices for the 2023 crop year from
September 1, 2023, to August 31, 2024; however, they do not represent estimated prices for either the 2023 or 2024 calendar year. The projected USDA average corn price of $4.85 per bushel would be lower than the average prices of $6.54 per bushel in 2022-23 and $6.00 per bushel in 2021-22 and would compare to recent national average corn prices of $4.53 per bushel for 2020-21, and $3.56 per bushel for 2019-20.
USDA maintained the projected U.S. average farm-level soybean price for the 2023-24 marketing year at $12.90 per bushel, which was the same as the October estimate. The 2023-24 projected national average soybean price compares to prices of $14.20 per bushel in 2022-23, $13.30 per bushel in 2021-22, $10.80 per bushel for 202021, and $8.57 per bushel for 2019-20. The fact that soybean ending stocks remain fairly tight may offer some opportunities for short-term rallies for farm-level soybean prices in the coming months, especially if there are any weather-related production issues in South America.
USDA Increases 2023 Corn and Soybean Yield Projections
Based on the USDA Crop Production Report released on November 9, the projected U.S. average corn yield for 2023 will be 174.9 bushels per acre, which would be an increase from the final 2022 average yield of 173.4 bushels per acre but would still trail the record U.S. corn yield of 177 bushels per acre in 2021. This compares to other recent U.S. corn yields of 171.4 bushels per acre in 2020, 167.5 bushels per acre in 2019, and 176.4 bushels per acre in 2018. The projected 2023 U.S. harvested corn acreage is 87.1 million acres, representing an increase of 10.1 percent from 79.1 million acres that were harvested last year, which is quite significant.
The November USDA Report increased the estimated 2023 corn yields from the October report by 7 bushels per acre in North Dakota, by 6 bushels per acre in Wisconsin, by 5 bushels per acre in South Dakota, by 3 bushels per acre in Illinois and Indiana, by 2 bushels per acre in Minnesota, and 1 bushel per acre in Iowa. The latest report left the projected corn yield unchanged from a month earlier in Ohio and reduced the estimated yield in Nebraska by 1 bushel per acre. Minnesota is projected at an average corn yield of 181 bushels per acre in 2023, compared to 195 bushels per acre in 2022, with Iowa the same as last year at 200 bushels per acre in 2023. Other projected state average corn yields for 2023 are Illinois at 203 bushels per acre, Indiana at 200 bushels per acre, Ohio at 195 bushels per acre, Nebraska at 173 bushels per acre, Wisconsin at 171 bushels per acre, South Dakota at 152 bushels per acre, and North Dakota at 143 bushels per acre.
USDA is estimating the 2023 U.S. soybean yield at 49.9 bushels per acre, which is an increase of 0.3 bushels from the October estimate. The projected 2023 national average soybean yield compares to 49.6 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 2023 harvested soybean acreage is projected at just under 82.8 million acres, which is down from the 2022 U.S. soybean harvested acreage of just over 86.2 million acres. This compares to harvested soybean acreage of 86.3 million acres in 2021 and 82.6 million acres in 2020.
USDA is estimating the 2023 Minnesota soybean yield at 48 bushels per acre, which is down from 50 bushels per acre in 2022, while Iowa is projected at 58 bushels per acre in 2023, which is down slightly from 58.5 bushels per acre last year and compares to the record yield of 63 bushels per acre in 2021. Estimated 2023 soybean yields in other states include Illinois and Indiana at 61 bushels per acre, Ohio at 58 bushels per acre, Nebraska at 51 bushels per acre, Wisconsin at 49 bushels per acre, South Dakota at 41 bushels per acre, and North Dakota at 34 bushels per acre.
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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/