PF Report Reaction: USDA raises crop estimates, ending stocks

Market reaction

Ahead of the report, corn futures were trading around a nickel lower, soybeans were about a dime lower, wheat futures were mostly 10 to 15 cents lower and cotton was about 200 points higher.

As of 11:30 a.m. CT, corn futures are trading around a nickel lower, soybeans are mostly 10 to 16 cents lower, SRW wheat futures are 11 to 12 cents lower, HRW and HRS wheat are 2 to 4 cents lower and cotton is around 150 points higher.
 

U.S. crop production

Corn: 15.234 billion bu.; trade expected 15.079 billion bu.
— compares to 15.064 billion bu. in October; 13.730 billion bu. in 2022

Beans: 4.129 billion bu.; trade expected 4.103 billion bu.
— compares to 4.104 billion bu. in October; 4.276 billion bu. in 2022

Cotton: 13.090 million bales; trade expected 12.730 million bales
— compares to 12.817 million bales in October; 14.47 million bales in 2022

USDA raised its corn crop estimate 170 million bu. from last month, whereas traders expected a 15-million-bu. increase. USDA increased the average yield by 1.9 bu. to 174.9 bu. per acre and left harvested area unchanged from last month at 87.096 million acres.

Across the Corn Belt, USDA raised yields in Illinois (up 3 bu. to 203 bu. per acre), Indiana (up 3 bu. to 200 bu.), Iowa (up 1 bu. to 200 bu.), Michigan (up 1 bu. to 171 bu.), Minnesota (up 2 bu. to 181 bu.), Missouri (up 6 bu. to 147 bu.), North Dakota (up 7 bu. to 143 bu.), South Dakota (up 5 bu. to 152 bu.) and Wisconsin (up 6 bu. to 171 bu.). USDA left the yield unchanged in Ohio (195 bu. per acre). USDA cut its yield estimate in Kansas (down 1 bu. to 121 bu. per acre) and Nebraska (down 1 bu. to 173 bu.).  

USDA raised its soybean crop estimate 25 million bu. from last month, whereas traders expected a 1-million-bu. decline. USDA increased the national average yield by 0.3 bu. to 49.9 bu. per acre. It left harvested area unchanged at 82.791 million acres.

Of the top 13 production states, USDA raised yield in Michigan (up 1 bu. to 47 bu. per acre), North Dakota (up 1 bu. to 34 bu.), Ohio (up 1 bu. to 58 bu.), South Dakota (up 1 bu. to 44 bu.) and Wisconsin (up 5 bu. to 49 bu.). USDA left its yield estimate unchanged in Arkansas (53 bu. per acre), Illinois (61 bu.), Indiana (61 bu.), Iowa (58 bu.), Kansas (26 bu.), Minnesota (48 bu.) and Missouri (45 bu.). USDA cut the yield estimate in Nebraska (down 3 bu. to 51 bu. per acre).

USDA increased its cotton crop estimate by 273,000 bales from last month, whereas traders expected an 87,000-bale cut. USDA raised its yield estimate 16 lbs. to 783 lbs. per acre and left harvested area at 8.021 million bales. USDA cut its Texas yield estimate 26 lbs. per acre and raised the Georgia yield 21 lbs. per acre from last month.

U.S. carryover

Corn: 2.156 billion bu. for 2023-24, up from 2.111 billion bu. in October
— compares to 1.361 billion bu. in 2022-23

Beans: 245 million bu. for 2023-24, up from 220 million bu. in October
— compares to 268 million bu. in 2022-23

Wheat: 684 million bu. for 2023-24, up from 670 million bu. in October
— compares to 582 million bu. in 2022-23

Cotton: 3.2 million bales for 2023-24, up from 2.8 million bales in October
— compares to 4.25 million bales in 2022-23

Projected 2023-24 corn carryover was raised 45 million bu. from last month and was 27 million bu. above the average pre-report trade estimate. Total supplies increased 170 million bu. from last month due to the bigger crop estimate. Total use increased 125 million bu. from last month with feed & residual use at 5.65 billion bu. (up 50 million bu.), food, seed & industrial use at 6.74 billion bu. (up 25 million bu., with all the increase in the corn-for-ethanol component that now stands at 5.325 billion bu.) and exports at 2.075 billion bu. (up 50 million bu. from last month). USDA puts the national average on-farm cash corn price at $4.85, down a dime from last month.

Projected soybean carryover for 2023-24 increased 25 million bu. from last month and was 24 million bu. above the average pre-report trade estimate. Total supplies increased 25 million bu. due to the bigger crop estimate. The only change on the demand side of the balance sheet was a 1-million-bu. cut in estimated residual use to 26 million bushels. Projected crush was unchanged from last month at 2.3 billion bu. with exports unchanged at 1.755 billion bushels. USDA projects the national average on-farm cash soybean price for 2023-24 at $12.90, unchanged from last month.

Wheat carryover for 2023-24 rose 14 million bu. from last month and was 15 million bu. above the average pre-report trade estimate. USDA increased total supply 10 million bu. due to a 10-million-bu.- increase in projected imports to 145 million bushels. On the demand side of the balance sheet, total use was cut 4 million bu. from last month due to a 4-million-bu. reduction to food use to 970 million bushels. Seed use was unchanged at 65 million bu., feed & residual unchanged at 120 million bu. and exports were unchanged from last month at 700 million bushels. USDA puts the national average on-farm cash wheat price for 2023-24 at $7.20, down a dime from last month.

Projected cotton carryover increased 400,000 bales from last month. USDA raised total supplies 280,000 bales from last month due to the larger crop estimate. On the demand side of the balance sheet, USDA cut domestic use 100,000 bales (to 2.05 million) and trimmed unaccounted use 30,000 bales (to -110,000). Exports were unchanged from last month at 12.2 million bales. USDA puts the national average on-farm cash cotton price for 2023-24 at 77 cents, down 3 cents from last month.

Global carryover

Corn: 314.99 MMT for 2023-24, up from 312.40 MMT in October
— compares to 299.22 MMT in 2022-23

Beans: 114.51 MMT for 2023-24, down from 115.62 MMT in October
— compares to 100.31 MMT for 2022-23

Wheat: 258.69 MMT for 2023-24, up from 258.13 MMT in October
— compares to 269.55 MMT in 2022-23

Cotton: 81.50 million bales for 2023-24, up from 79.92 million bales in October
— compares to 83.04 million bales in 2022-23

Global production highlights

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

Brazil beans: 163.0 MMT for 2023-24, compares with 163.0 MMT in October
— compares to 158.0 MMT in 2022-23

Argentina wheat: 15.0 MMT for 2023-24, compares with 16.5 MMT in October
— compares to 12.55 MMT in 2022-23

Australia wheat: 24.5 MMT for 2023-24, compares with 24.5 MMT for October
— compares to 39.69 MMT in 2022-23

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

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

EU wheat: 134.3 MMT for 2023-24, compares with 134.0 MMT in October
— compares to 134.19 MMT in 2022-23

Russia wheat: 90.0 MMT for 2023-24, compares with 85.0 MMT in October
— compares to 92.0 MMT in 2022-23

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

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

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

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

Ukraine corn: 29.5 MMT for 2023-24, compares with 28.0 MMT for October
— compares to 27.0 MMT in 2022-23

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