Market reaction
Ahead of USDA’s reports, corn futures were trading 2 to 3 cents lower, soybeans were 4 to 8 cents lower, winter wheat futures were 7 to 11 cents higher, spring wheat was 1 to 2 cents higher and cotton futures were 55 to 65 points higher.
As of 11:30 a.m. CT, corn futures are trading 3 cents higher to 4 cents lower amid bull spreading, soybeans are 7 to 15 cents lower, SRW wheat is 15 cents higher, HRW wheat is 30 to 42 cents higher, HRS wheat is 16 to 18 cents higher and cotton is 120 to 130 points higher.
Winter wheat production
All wheat: 1.659 billion bu.; trade expected 1.789 billion bu.
— compares with 1.650 billion bu. in 2022
All winter wheat: 1.130 billion bu.; trade expected 1.230 billion bu.
— compares with 1.104 billion bu. in 2022
HRW: 514 million bu.; trade expected 591 million bu.
— compares with 531 million bu. in 2022
SRW: 406 million bu.; trade expected 399 million bu.
— compares with 337 million bu. in 2022
White winter: 210 million bu.; trade expected 241 million bu.
— compares with 236 million bu. in 2022
USDA’s initial winter wheat crop estimate was up only 26 million bu. from last year and 100 million bu. less than traders expected. USDA estimates harvested area at 25.286 million acres, up 8% from last year, but producers expect to harvest only 67% of planted area, the lowest ratio since 1917. The national average yield is estimated at 44.7 bu. per acre, down 2.3 bu. from last year.
USDA estimates the HRW crop down 17 million bu. from last year and 77 million bu. less than expected; SRW production up 69 million bu. from last year and 7 million bu. more than expected; and the white winter wheat crop down 26 million bu. from last year and 31 million bu. less than expected.
USDA’s all-wheat crop projection of 1.659 billion bu. implies combined other spring and durum wheat production of 529 million bu., down 17 million bu. from last year.
U.S. carryover
Corn: 1.417 billion bu. for 2022-23; up from 1.342 billion bu. in April
— projection of 2.222 billion bu. for 2023-24
Beans: 215 million bu. for 2022-23; up from 210 million bu. in April
— projection of 335 million bu. for 2023-24
Wheat: 598 million bu. for 2022-23; unchanged from 598 million bu. in April
— projection of 556 million bu. for 2023-24
Cotton: 3.5 million bales for 2022-23; down from 4.1 million bales in April
— projection of 3.3 million bales for 2023-24
USDA increased old-crop corn carryover 75 million bu. from last month. The estimate was also 51 million bu. above the average pre-report trade estimate. USDA made no changes to the supply-side of the old-crop balance sheet. On the demand-side, USDA made no changes to domestic use and cut 75 million from estimated exports. USDA puts the national average on-farm cash corn price for 2022-23 at $6.60, unchanged from last month.
For 2023-24, USDA projects corn carryover of 2.222 billion bu., 128 million bu. above the average pre-report trade estimate. As expected, USDA projects 92 million planted acres and harvested acres of 84.1 million (91.4% harvested acre percentage). At a trendline yield of 181.5 bu. per acre, the crop would reach 15.265 billion bushels. Feed and residual use for 2023-24 is projected at 5.65 billion bu., up 375 million bu. from the current marketing year. Food, seed & industrial use is expected at 6.735 billion bu., up 55 million bu. from this year (corn-for-ethanol is expected to reach 5.3 billion bu., up 50 million bu. from this year). Exports are projected to recover to 2.1 billion bu., up 325 million bu. from this year. USDA puts the national average on-farm cash corn price for 2023-24 at $4.80, down $1.80 from the current marketing year.
USDA increased old-crop soybean carryover 5 million bu. from last month. The estimate was 3 million bu. above the average pre-report trade estimate. USDA increased estimated imports 5 million bu. to raise total supplies to 4.571 billion bushels. USDA made no changes from last month to the demand-side of the old-crop balance sheet. The national average on-farm cash soybean price is $14.20, down a dime from last month.
For 2023-24, USDA projects soybean carryover of 335 million bu., 42 million bu. above the average pre-report trade estimate. As expected, USDA projects planted bean acres of 87.5 million with harvested acres of 86.7 million (99.1% harvested acre percentage). At a trendline yield of 52 bu. per acre, the crop would reach 4.510 billion bushels. On the demand-side, USDA projects soybean crush of 2.310 billion bu., up 90 million bu. from this year. Exports are expected at 1.975 billion bu., down 40 million bu. from the current marketing year. Seed use is expected at 101 million bu., down 1 million bu. from 2022-23. Residual use is put at 25 million bu., 6 million more than this year. USDA projects a national average on-farm cash bean price for 2023-24 of $12.10, down $2.10 from the current marketing year.
Old-crop wheat carryover was unchanged from last month and 5 million bu. below the average pre-report trade estimate. USDA made no changes to the supply- or demand-side of the balance sheet. USDA lowered the national average on-farm cash wheat price a nickel from last month to $8.85.
For 2023-24, wheat carryover is projected at 556 million bu., 46 million bu. below the average pre-report trade estimate. Total supplies are projected at 2.393 billion bu., down 80 million bu. from 2022-23. Despite a 4.2-million-acre increase in planted wheat acres from year-ago, the crop is projected to be just 9 million bushels bigger. Imports are also expected to increase 10 million bu., to 135 million. On the demand side, USDA puts food use at 977 million bu., up 2 million from 2022-23. Seed use is projected at 65 million bu., down 5 million bu. from this year. Feed and residual wheat use for 2023-24 is put at 70 million bu., up 15 million bu. from this year. Exports are projected at 725 million bu., down 50 million bu. from 2022-23. USDA puts the national average on-farm cash wheat price for 2023-24 at $8.00, down 85 cents from the current marketing year.
Old-crop cotton carryover is estimated down 600,000 bales from last month. On the supply-side of the old-crop balance sheet, USDA cut 130,000 acres to harvested acres and increased the national average yield 3 lbs. per acre to 950 lbs. per acre. That put adjusted last year’s cotton crop down 210,000 bales from last month. Domestic use was unchanged from last month and exports are now put at 12.6 million bales, up 400,000 bales from last month. Unaccounted use was cut 20,000 bales, to 20,000 bales. USDA left the national average on-farm cash cotton price at 82 cents, unchanged from last month.
For 2023-24, cotton carryover is projected at 3.3 million bales, 880,000 bales below the average pre-report trade estimate. USDA projects a crop of 15.5 million bales, up slightly more than 1 million from 2022. Total domestic use is projected at 2.2 million bales, up 100,000 from the current marketing year. Exports in 2023-24 are expected to reach 13.5 million, up 900,000 bales from this year. USDA puts the national average on-farm cash cotton price for 2023-24 at 78 cents, down 4 cents from the current marketing year.
Global carryover
Corn: 297.41 MMT for 2022-23; up from 295.35 MMT in April
— projection of 312.9 MMT for 2023-24
Beans: 101.04 MMT for 2022-23; up from 100.29 MMT in April
— projection of 122.5 MMT for 2023-24
Wheat: 266.28 MMT for 2022-23; up from 265.05 MMT in April
— projection of 264.34 MMT for 2023-24
Cotton: 92.63 million bales for 2022-23; up from 92.01 million bales in April
— projection of 92.28 million bales for 2023-24
Global production highlights
Argentina beans: 27.0 MMT for 2022-23; compares with 27.0 MMT in April
— projection of 48.0 MMT for 2023-24
Brazil beans: 155.0 MMT for 2022-23; compares with 154.0 MMT in April
— projection of 163.0 MMT for 2023-24
Argentina wheat: 12.55 MMT for 2022-23; compares with 12.55 MMT in April
— projection of 19.5 MMT for 2023-24
Australia wheat: 39.0 MMT for 2022-23; compares with 39.0 MMT in April
— projection of 29.0 MMT for 2023-24
China wheat: 137.72 MMT for 2022-23; compares with 137.72 MMT in April
— projection of 140.0 MMT for 2023-24
Canada wheat: 33.82 MMT for 2022-23; compares with 33.82 MMT in April
— projection of 37.0 MMT for 2023-24
EU wheat: 134.34 MMT for 2022-23; compares with 134.34 MMT in April
— projection of 139.0 MMT for 2023-24
Russia wheat: 92.0 MMT for 2022-23; compares with 92.0 MMT in April
— projection of 81.5 MMT for 2023-24
Ukraine wheat: 20.9 MMT for 2022-23; compares with 21.0 MMT in April
— projection of 16.5 MMT for 2023-24
China corn: 277.2 MMT for 2022-23; compares with 277.2 MMT in April
— projection of 280.0 MMT for 2023-24
Argentina corn: 37.0 MMT for 2022-23; compares with 37.0 MMT in April
— projection of 54.0 MMT for 2023-24
Brazil corn: 130.0 MMT for 2022-23; compares with 125.0 MMT in April
— projection of 129.0 MMT for 2023-24
Ukraine corn: 27.0 MMT for 2022-23; compares with 27.0 MMT in April
— projection of 22.0 MMT for 2023-24
South Africa corn: 16.7 MMT for 2022-23; compares with 16.7 MMT in April
— projection of 16.8 MMT for 2023-24
China cotton: 30.7 million bales for 2022-23; compares with 30.5 million bales in April
— projection of 27.5 million bales for 2023-24