MarketsFarm — The Chicago Board of Trade (CBOT) saw futures come down after the U.S. Department of Agriculture (USDA) released its monthly world agricultural supply and demand estimates (WASDE) on Wednesday.
Corn prices were 18 cents per bushel lower on the day, while soybeans lost 27-33 cents (all figures US$). Chicago soft wheat shed 24-28 cents, while Kansas City hard red and Minneapolis spring wheat varieties dropped 11-14 cents.
USDA estimated domestic corn production at 15.32 billion bushels, 55 million more than the June estimate and 1.59 billion more than in 2022-23. However, the projected average yield was cut by four bushels per acre from the June estimate, to 177.5 bu./ac. Nevertheless, the figure is higher than the average of 173.3 in 2022-23. Ending stocks for U.S. corn only went up five million bushels from the June estimate, to 2.262 billion, while the 2022-23 carryover was 1.402 billion.
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“Analysts were looking for a yield lowering of 4.9 (bu./ac.)…Traders were looking for a six or seven (bu./ac.) decline today,” Ryan Ettner of Allendale Inc. at McHenry, Ill. said.
“A big rain system came right across the Midwest today. Along with recent rain systems, it makes it even harder to justify eventually reaching a 20-bushel cut to come off of US$5 (per bushel) corn.”
Projected U.S. soybean production took a big cut from the June estimate, losing 210 million bushels, to 4.3 billion, at the higher end of pre-report expectations. The figure is still higher than the 4.276 billion produced in 2022-23. However, the average yield estimate was unchanged from the previous month, remaining at 52 bu./ac., 2.5 higher than in 2022-23. Projected ending stocks also took a dive, dropping 50 million bushels, to 300 million, while also higher than the 255 million last year. Pre-report estimates had new-crop ending stocks at 199 million bushels.
Exports were lowered by 125 million bushels from the June estimate, to 1.85 billion, which was also 130 million less than the 2022-23 total. According to Ettner, this surprised the trade.
“Analysts were looking for no reduction in exports despite the fact exports continue to be poor and have been poor for three months,” he said. “I think it’s completely justified.”
U.S. wheat production was projected to increase to 1.739 billion bushels, slightly above trade expectations. The projection is 74 million higher than the June estimate and 89 million more than the 2022-23 production total. The estimated average yield increased by 1.2 bu./ac. from the June report to 46.1, slightly below the 46.5 average from 2022-23. Ending stocks gained 30 million bushels from the June estimate to 592 million, 12 million higher than last year.
Hard red spring wheat production in the U.S. was estimated at 441 million bushels, five million less than in 2022-23. Ending stocks were projected at 155 million, three million less than last year’s total.
Ettner also said he was surprised the trade did not expect a reduction in exports. The July estimate for exports was left unchanged from June at 725 million bushels, 34 million lower than in 2022-23.
USDA projected world ending stocks for corn to total 314.12 million tonnes for 2023-24, 140,000 tonnes more than the June estimate and 17.82 million more than last year’s ending stocks. The world carryover for soybeans was pegged at 120.98 million, a 2.36 million cut from the June estimate, but 18.08 million more than the 2022-23 total. The world wheat carryout was projected at 266.53 million for 2023-24, a 4.18 million cut from the June estimate and 2.78 million less than last year’s figure.
— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.
