MarketsFarm — Most of the October world agricultural supply/demand estimates (WASDE) released Thursday from the U.S. Department of Agriculture (USDA) came out lower than trade expectations, causing price jumps on the Chicago Board of Trade (CBOT).
“Many people were not expecting a major (average) yield change,” Ryan Ettner, trader for Allendale Inc. in McHenry, Ill. said, adding that corn and soybean exports have also been very slow.
“Not a major change, but when you’re expecting no change at all, it may come out surprisingly positive.”
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Corn
USDA cut its 2023-24 corn production estimate by 70 million bushels from its September report, to 15.064 billion, lower than the trade’s average forecast of 15.1 billion. The average yield was cut by 0.8 bushels per acre to 173 bu./ac., with the trade expecting 173.5. In 2022-23, U.S. corn production was 13.715 billion bushels for an average yield of 173.4 bu./ac.
U.S. corn 2023-24 ending stocks were pegged at 2.111 billion bushels, 34 million less than the average trade estimate and 110 million less than USDA’s September guess. In 2022-23, the carryout was 1.361 billion bushels. World corn ending stocks were guessed at 312.4 million tonnes, lower than the trade’s 313 million-tonne estimate, as well as the 314 million-tonne guess by USDA in September. USDA estimated last year’s world corn carryout to be 298.1 million tonnes.
Soy
Projected 2023-24 U.S. soybean production was revised downward by 42 million bushels from September to 4.104 billion, 28 million less than the average trade estimate. The average yield was 49.6 bu./ac., at the lower end of trade estimates and 0.5 less than USDA’s September forecast. In 2022-23, soybean production was 4.27 billion bushels with an average yield of 49.6 bu./ac.
Carryout for 2023-24 U.S. soybeans were 220 million bushels, equal to last month’s USDA report but 16 million lower than the trade’s average guess. Last year’s carryout was 268 million bushels. World ending stocks were projected to be 115.62 million tonnes, below average trade guesses and USDA’s September estimate of 119.3 million. For 2022-23, the world had a carryout of 101.9 million tonnes.
“Most expected the (U.S.) soybean carryout to be increased, but was instead left the same,” Ettner said.
Wheat
Unlike corn and soybeans, 2023-24 wheat production went up to 1.812 billion bushels, compared to USDA’s September estimate of 1.734 billion and last year’s total of 1.65 billion. The average yield estimate was 48.6 bu./ac., higher than last month’s guess of 45.8 bu./ac. and last year’s estimate of 46.5 bu./ac.
USDA estimated 2023-24 wheat carryout to be 670 million bushels, with the trade predicting 646 million and last month’s USDA projection at 615 million. Last year’s carryout was 582 million. The estimate for world ending stocks was 258.1 million tonnes, 700,000 less than the average trade estimate and 500,000 less than USDA’s September projection. Last year’s total was 267.6 million tonnes.
“Not only was (the carryout) a significant increase, it was much more than expected,” Ettner explained. “I would think (the wheat) market will drift down quicker than the other two… The immediate bounce (in prices) should be wrapped up (Thursday or Friday).”
— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.
