The latest World Agricultural Supply Demand Estimates report did not yield any major surprises as farmers are beginning in earnest to harvest fall crops and plant winter wheat in the Plains states.
The U.S. Department of Agriculture’s September report came in as expected with lower yields reported for both corn and soybeans, according to Naomi Blohm with Total Farm Marketing. Blohm writes a monthly market analysis column for High Plains Journal.
“In some regard, this report allows the USDA to buy time until more is known regarding corn and soybean yield as combines begin to roll early this fall,” Blohm said.
She noted there was no change for new crop corn demand in any fashion. Acres for corn were increased a bit more than expected. Planted corn acres are now pegged at 94.9 million acres, up from 94.1 million acres. Harvested corn acres are now pegged at 87.1 million acres, up from 86.3 million acres.
“The net result is that new crop corn ending stocks are still stubbornly large at 2.221 billion bushels,” Blohm told HPJ on Sept. 15. “This report in and of itself did not offer anything friendly for corn, yet trade is mindful of a seasonal harvest low that is likely looming, especially as producers in fields are suggesting yields will be even less than anticipated due to the summer heat.”
Corn production for 2023-24 is forecast at 15.1 billion bushels, up 23 million from last month as greater harvested area more than offsets a reduction in yield, according to the WASDE report. The national average yield is forecast at 173.8 bushels per acre, down 1.3 bushels per acre.
The September 2023-24 U.S. corn outlook is for slightly larger supplies and ending stocks. Projected beginning stocks for 2023-24 are 5 million bushels lower based on mostly offsetting trade and corn used for ethanol changes for 2022-23. Total U.S. corn use is unchanged at 14.4 billion.
The season-average corn price received by producers is unchanged at $4.90 per bushel.
U.S. soybean supply and use changes for 2023-24 include lower beginning stocks, production, crush, exports, and ending stocks. Lower beginning stocks reflect an increase for exports in 2022-23. Soybean production is projected at 4.1 billion bushels, down 59 million bushels with higher harvested area offset by a lower yield. The harvested area is raised 0.1 million acres from the August forecast. The soybean yield of 50.1 bushels per acre is down 0.8 bushels from last month. The soybean crush forecast is reduced 10 million bushels and the export forecast is reduced 35 million bushels on lower supplies.
“I’m a bit surprised that the USDA already cut demand for new crop crush and exports. To me this seems premature,” Blohm said. “Nonetheless, ending stocks for soybeans are now pegged at 220 million bushels, down from 245 last month, and keeps the supply picture tight until harvest of 2024.”
The U.S. season-average soybean price is forecast at $12.90 per bushel, up $0.20 from August, WASDE indicated. The soybean meal price is unchanged at $380 per short ton and the soybean oil price is raised 1 cent to 63 cents per pound.
Global 2023-24 soybean crush was reduced 1.8 million tons to 327.7 million tons on lower crush for Argentina, Pakistan, the European Union, Thailand, and the U.S.
The 2023-24 U.S. all wheat outlook for supply and use is unchanged this month with offsetting by-class changes on exports.
For Chicago wheat, there does seem to be a seasonal tendency for prices to increase from now into mid-October, Blohm said.
The WASDE report indicated that global supplies of wheat are slipping lower. World ending stocks of wheat were reduced to 258.6 million metric tons, which was well below pre-report estimates looking for ending stocks to be closer to 264 million metric tons. Supply was cut 7.2 million metric tons and usage was mostly unchanged, taking world ending stocks down 7 million metric tons from August’s report. This global ending stock number is actually the lowest since 2015-16 and was reduced 7 million metric tons to 258.6 million metric tons.
The combination of strong demand and lower production is leading to lower global ending stocks for many countries around the world, Blohm said, and many of those countries are the leading global exporters of wheat.
On the recent USDA report, Canadian wheat production was decreased to 31 million metric tons. Since the USDA report was released, Statistics Canada pegged the crop even lower, putting their 2023-24 all wheat production at 29.835 million metric tons.
Australia has been dealing with drought, and the USDA report lowered that country’s production to 26 million metric tons.
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Production in Argentina was lowered to 16.5 million metric tons, down from 17.5 million metric tons a month ago, Blohm said. A decrease in production was also noted for the EU with production coming in at 134 million metric tons, down from 135 million metric tons last month. When looking at all of the information, according to the USDA, “If realized, this would be the first year-to-year decline in global wheat production since 2018-19.”
“With wheat prices trading dramatically lower for over one year, the tide may be turning as fundamentals, technical charts, and seasonal price aspect may be aligning for a price recovery bounce at a minimum,” Blohm said.
The projected 2023-24 season-average farm price is also unchanged at $7.50 per bushel, WASDE indicated.
The 2023-24 U.S. cotton projections include higher beginning stocks but lower production, exports, and ending stocks. Beginning stocks have increased 550,000 bales, largely reflecting ending stocks data for the previous year from the Agricultural Marketing Service and the National Agricultural Statistics Service Cotton System Consumption and Stocks report.
The 2023-24 U.S. production forecast is 860,000 bales lower this month, with the Southeast and Southwest leading the decline. Projected consumption is unchanged from August, but exports are down 200,000 bales and ending stocks are 100,000 bales lower.
The season-average price for upland cotton projected for 2023-24 is 80 cents per pound, up 1 cent from the previous month.
The outlook for 2023-24 U.S. rice this month is for larger supplies, exports, domestic use, and ending stocks. Supplies are increased on higher beginning stocks, production, and imports. Beginning stocks are raised 5.7 million per hundred weight to 30.3 million per hundredweight on the NASS Rice Stocks report, released August 23. The average all rice yield is up 52 pounds per acre to a record 7,751 pounds per acre.
Dave Bergmeier can be reached at 620-227-1822 or [email protected].