PF Report Reaction: As expected, no major changes from USDA

Market reaction

Ahead of the report, corn futures were trading 1 to 2 cents higher, soybeans were mostly 8 cents higher, SRW wheat was mostly 3 cents lower, HRW wheat was 3 to 4 cents higher, HRS wheat was narrowly mixed and cotton was around 80 points lower.

As of 11:30 a.m. CT, corn futures are trading around a penny lower, soybeans are 4 to 5 cents lower, SRW wheat is 10 to 12 cents lower, HRW and HRS wheat are 4 to 6 cents lower and cotton is around 130 points lower. 
 

U.S. crop production

Cotton: 12.776 million bales; trade expected 13.080 million bales
— compares to 13.090 million bales in November; 14.47 million bales in 2022

USDA cut its cotton crop estimate by 314,000 bales from last month. The national average yield estimate dropped 18 lbs. to 765 lbs. per acre. Harvested area remained at 8.021 million acres.

USDA cut the Texas yield 68 lbs. to 421 lbs. per acre. Georgia’s yield was unchanged at 1,025 lbs. per acre.

U.S. carryover

Corn: 2.131 billion bu. for 2023-24, down from 2.156 billion bu. in November
— compares to 1.361 billion bu. in 2022-23

Beans: 245 million bu. for 2023-24, unchanged from 245 million bu. in November
— compares to 268 million bu. in 2022-23

Wheat: 659 million bu. for 2023-24, down from 684 million bu. in November
— compares to 582 million bu. in 2022-23

Cotton: 3.1 million bales for 2023-24, down from 3.2 million bales in November
— compares to 4.25 million bales in 2022-23

USDA cut expected 2023-24 corn carryover 25 million bu. from last month. That put ending stocks 21 million bu. below the average pre-report trade estimate. USDA made no change on the supply side of the balance sheet. USDA left feed and residual use unchanged from last month (5.65 billion bu.) and held food, seed & industrial use steady (6.74 billion bu., with 5.325 billion bu. in corn-for-ethanol use). USDA increased projected corn exports 25 million bu., to 2.1 billion bushels. USDA puts the national average on-farm cash corn price for 2023-24 at $4.85, unchanged from last month.

USDA held expected 2023-24 soybean carryover steady with last month at 245 million bushels. That put ending stocks 2 million bu. above the average pre-report trade estimate. USDA made no change to the supply or demand side of the balance sheet. USDA puts the national average on-farm cash soybean price for 2023-24 at $12.90, unchanged from last month.

USDA cut expected 2023-24 wheat carryover 25 million bu. from last month. That put ending stocks 21 million bu. below the average pre-report trade estimate. USDA made no change on the supply side of the balance sheet. On the demand side of the sheet, USDA increased projected exports 25 million bu. to 725 million bushels. In the wheat-class breakdown, USDA increased estimated soft red winter wheat exports 30 million bu. from last month (to 175 million bu.) and cut estimated white wheat exports 5 million bu. (to 155 million). USDA puts the national average on-farm cash wheat price for 2023-24 at $7.30, up a dime from last month.

USDA cut cotton ending stocks 100,000 bales for 2023-24. That put carryover 160,000 bales below the average pre-report trade estimate. USDA cut 310,000 bales from total supplies due to the smaller 2023 crop estimate. Domestic use was cut 150,000 bales (to 1.9 million) and projected exports were held steady at 12.2 million bales. Unaccounted use was also cut 60,000 bales to -170,000. USDA puts the national average on-farm cash cotton price for 2023-24 at 77 cents, unchanged from last month.

Global carryover

Corn: 315.22 MMT for 2023-24, up from 314.99 MMT in November
— compares to 300.10 MMT in 2022-23

Beans: 114.21 MMT for 2023-24, down from 114.51 MMT in November
— compares to 101.92 MMT for 2022-23

Wheat: 258.20 MMT for 2023-24, down from 258.69 MMT in November
— compares to 269.85 MMT in 2022-23

Cotton: 82.40 million bales for 2023-24, up from 81.50 million bales in November
— compares to 82.83 million bales in 2022-23

Global production highlights

Argentina beans: 48.0 MMT for 2023-24, compares with 48.0 MMT in November
— compares to 25.0 MMT in 2022-23

Brazil beans: 161.0 MMT for 2023-24, compares with 163.0 MMT in November
— compares to 160.0 MMT in 2022-23

Argentina wheat: 15.0 MMT for 2023-24, compares with 15.0 MMT in November
— compares to 12.55 MMT in 2022-23

Australia wheat: 25.5 MMT for 2023-24, compares with 24.5 MMT for November
— compares to 40.55 MMT in 2022-23

China wheat: 137.0 MMT for 2023-24; compares with 137.0 MMT in November
— compares to 137.72 MMT in 2022-23

Canada wheat: 31.95 MMT for 2023-24, compares with 31.0 MMT in November
— compares to 34.34 MMT in 2022-23

EU wheat: 134.3 MMT for 2023-24, compares with 134.3 MMT in November
— compares to 134.19 MMT in 2022-23

Russia wheat: 90.0 MMT for 2023-24, compares with 90.0 MMT in November
— compares to 92.0 MMT in 2022-23

Ukraine wheat: 22.5 MMT for 2023-24, compares from 22.5 MMT in November
— compares to 21.5 MMT in 2022-23

China corn: 277.0 MMT for 2023-24, compares with 277.0 MMT in November
— compares to 277.2 MMT in 2022-23

Argentina corn: 55.0 MMT for 2023-24, compares with 55.0 MMT in November
— compares to 34.0 MMT in 2022-23

Brazil corn: 129.0 MMT for 2023-24, compares with 129.0 MMT in November
— compares to 137.0 MMT in 2022-23

Ukraine corn: 30.5 MMT for 2023-24, compares with 29.5 MMT for November
— compares to 27.0 MMT in 2022-23

South Africa corn: 16.8 MMT for 2023-24, compares with 16.8 MMT in November
— compares to 17.1 MMT in 2022-23