Market reaction
Ahead of USDA’s reports, corn futures were trading 3 to 4 cents lower, soybeans were mostly 3 to 6 cents higher, winter wheat was 9 to 13 cents lower, spring wheat was 2 to 5 cents lower and cotton was 50 to 60 points lower.
As of 11:30 a.m. CT, corn futures are trading mostly 13 to 15 cents higher, soybeans are 15 to 25 cents higher, SRW wheat is near unchanged, HRW wheat is 5 to 7 cents higher, spring wheat is 5 to 11 cents higher and cotton is 180 to 200 points lower.
Annual Production Summary
Corn: 13.729 billion bu.; trade expected 13.933 billion bu.
— compares to 13.930 billion bu. in November; 15.074 billion bu. in 2021
Beans: 4.276 billion bu.; trade expected 4.362 billion bu.
— compares to 4.346 billion bu. in November; 4.465 billion bu. in 2021
Cotton: 14.680 million bales; trade expected 14.140 million bales
— compares with 14.242 million bales in December; 17.52 million bales in 2021
USDA cut its 2022 corn crop estimate by 201 million bu. from November, whereas traders expected a 3-million-bu. increase. The national average yield was increased 1 bu. to 173.3 bu. per acre, but harvested area was slashed 1.637 million acres to 79.207 million acres.
USDA lowered its 2022 soybean crop estimate by 70 million bu. from November. Traders expected a 16-million-bu. increase to the final production estimate. USDA cut the national average yield by 0.7 bu. to 49.5 bu. per acre and reduced harvested area by 295,000 acres to 86.336 million acres.
USDA raised its cotton crop estimate by 438,000 bales from last month. Harvested area was cut 435,000 acres to 7.441 million acres, but the national average yield increased 79 lbs. to 947 lbs. per acre.
Quarterly Grain Stocks
Corn: 10.809 billion bu.; trade expected 11.153 billion bu.
— compares to 1.377 billion bu. Sept. 1; 11.641 billion bu. Dec. 1, 2021
Beans: 3.022 billion bu.; trade expected 3.132 billion bu.
— compares to 274 million bu. Sept. 1; 3.136 billion bu. Dec. 1, 2021
Wheat: 1.280 billion bu.; trade expected 1.344 billion bu.
— compares to 1.778 billion bu. Sept. 1; 1.377 billion bu. Dec. 1, 2021
USDA estimates Dec. 1 corn stocks in all positions at 10.809 billion bu., down 832 million bu. (7.1%) from year-ago and 344 million bu. below the average pre-report trade estimate. On-farm stocks of corn at 6.748 billion are down 6.7% from year-ago and off-farm stocks of 4.061 are down 7.9% from year-ago. Implied use in the first quarter of the 2022-23 marketing year is 4.3 billion bu., down 7.9% from the same quarter of the 2021-22 marketing year.
USDA estimates Dec. 1 bean stocks in all positions at 3.022 billion bu., down 115 million bu. (3.7%) from year-ago and 110 million bu. below the average pre-report trade estimate. On-farm bean stocks of 1.477 are down 3% from year-ago and off farm stocks of 1.545 are down 4.3%. Implied use in the first quarter of the 2022-23 marketing year is 1.53 billion bu., down 4% from the same period last year.
USDA estimates Dec. 1 all-wheat stocks in all positions at 1.280 billion bu., down 97 million bu. (7.0%) from year-ago and 64 million bu. below the average pre-report trade estimate. On-farm wheat stocks 361.9 million are up 32.4% from year-ago and off-farm stocks of 918.3 million bu. are down 16.9% from last year. Implied use in the second quarter of the 2022-23 marketing year of 498 million bu. is up 26% from the same time last year.
Winter Wheat Seedings
All winter wheat: 36.950 mil. acres; trade expected 34.485 mil. acres
— compares to 33.271 mil. acres in 2022
HRW: 25.3 mil. acres; trade expected 23.824 mil. acres
— compares to 23.083 mil. acres in 2022
SRW: 7.9 mil. acres; trade expected 6.890 mil. acres
— compares to 6.570 mil. acres in 2022
White winter: 3.73 mil. acres; trade expected 3.631 mil. acres
— compares to 3.618 mil. acres in 2022
USDA estimates U.S. winter wheat seeding increased 3.679 million acres for the 2023-24 crop. Traders expected acres to be up around 1.2 million acres from last year.
HRW acres rose more than 2.2 million acres from last year, with top producer Kansas accounting for 2 million of the increase.
SRW acres increased more than 1.3 million acres from last year. A good portion of those acres could be double-cropped with soybeans.
White winter wheat acres increased 248,000 acres from last year.
U.S. carryover
Corn: 1.242 billion bu. for 2022-23; down from 1.257 billion bu. in December
Beans: 210 million bu. for 2022-23; down from 220 million bu. in December
Wheat: 567 million bu. for 2022-23; down from 571 million bu. in December
Cotton: 4.2 million bales for 2022-23; up from 3.5 million bales in December
USDA projects corn carryover at 1.242 billion bu., down 15 million bu. from last month and 72 million bu. below the average pre-report trade estimate. Total corn supplies for the 2022-23 marketing year of 15.157 billion bu. are down 200 million bu. from last month due to the cut to the 2022 corn crop. Total use is forecast at 13.915 billion bu., down 185 million bu. from last month. USDA projects corn feed & residual use at 5.275 billion bu. (down 25 million bu. from last month), food, seed & industrial use at 6.715 billion bu. (down 10 million bu.; corn-for-ethanol unchanged at 5.275 billion bu.) and exports are put at 1.925 billion bu. (down 150 million bu. from last month). USDA puts the national average on-farm cash corn price for 2022-23 at $6.70, unchanged from last month.
USDA projects soybean carryover at 210 million bu., down 10 million bu. from last month and 26 million bu. below the average pre-report trade estimate. Total soybean supplies for the 2022-23 marketing year of 4.276 billion bu. are down 68 million bu. from last month due to the smaller bean crop estimate. Total use is forecast at 4.355 billion bu., down 59 million bu. from last month with estimated crush unchanged at 2.245 billion bu., exports down 55 million bu. from last month to 1.990 billion bu., seed use unchanged at 102 million bu. and residual use down 4 million bu. to 18 million bushels. USDA puts the national average on-farm cash bean price for 2022-23 at $14.20, up 20 cents from last month.
Wheat carryover of 567 million bu. is down 4 million bu. from last month and is 13 million bu. below the average pre-report trade estimate. Total supplies are up 29 million bu. from last month. USDA made no change to the 2022 wheat crop, but increased beginning stocks by 29 million bushels. For 2021-22, USDA cut wheat feed & residual use 29 million bu. to account for the increase in old-crop supplies. Projected use for 2022-23 was increased 33 million bushels. USDA left food use unchanged at 977 million bu., increased seed use 3 million bu. to 69 million bu., increased wheat feed & residual use 30 million bu. to 80 million bu., and left exports unchanged from last month at 775 million bushels. USDA puts the national average on-farm cash wheat price for 2022-23 at $9.10, unchanged from last month.
Cotton carryover at 4.2 million bales is up 700,000 bales from last month and also 700,000 bales above expectations. USDA increased total supplies 440,000 bales from last month due to the bigger 2022 cotton crop estimate. Total use for 2022-23 is forecast down 250,000 bales from last month with exports now projected at 12 million bales, down 250,000 bales from last month. USDA puts the national average on-farm cash cotton price for 2022-23 at 83 cents, down 2 cents from last month.
Global carryover
Corn: 296.42 MMT for 2022-23; down from 298.40 MMT in December
Beans: 103.52 MMT for 2022-23; up from 102.71 MMT in December
Wheat: 268.39 MMT for 2022-23; up from 267.33 MMT in December
Cotton: 89.93 million bales for 2022-23; up from 89.56 million bales in December
Global production highlights
Argentina beans: 45.5 MMT for 2022-23; compares with 49.5 MMT in December
Brazil beans: 153.0 MMT for 2022-23; compares with 152.0 MMT in December
Argentina wheat: 12.5 MMT for 2022-23; compares with 12.5 MMT in December
Australia wheat: 36.6 MMT for 2022-23; compares with 36.6 MMT in December
China wheat: 137.72 MMT for 2022-23; compares with 138.0 MMT in December
Canada wheat: 33.82 MMT for 2022-23; compares with 33.82 MMT in December
EU wheat: 134.70 MMT for 2022-23; compares with 134.30 MMT in December
Russia wheat: 91.0 MMT for 2022-23; compares with 91.0 MMT in December
Ukraine wheat: 21.0 MMT for 2022-23; compares with 20.5 MMT in December
China corn: 277.2 MMT for 2022-23; compares with 274.0 MMT in December
Argentina corn: 52.0 MMT for 2022-23; compares with 55.0 MMT in December
Brazil corn: 125.0 MMT for 2022-23; compares with 126.0 MMT in December
Ukraine corn: 27.0 MMT for 2022-23; compares with 27.0 MMT in December
South Africa corn: 16.7 MMT for 2022-23; compares with 16.7 MMT in December
China cotton: 28.0 million bales for 2022-23; compares with 28.0 MMT in December