USDA increases corn crop projection for 2023.
“These numbers show the effects of August weather, with corn declining less than soybeans, but that’s to be expected,” stated Bill Lapp, president and creator of Advanced Economic Solutions, located in Omaha, Nebraska. When it comes to the times when crops might be most negatively influenced by unfavorable climatic circumstances, corn is more of a July crop and soybeans are more of an August one. Furthermore, it seems that 2023 saw a larger planting of corn and soybean acres than previously believed.
The USDA’s soybean forecast fell short of the average guess of 4,146 million bus and was close to the lower end of the pre-report trade estimate range. Pre-report trade forecasts, which varied from 14,762 million to 15,125 million tons, were outperformed by the USDA corn data.
Speaking of maize, Mr. Lapp stated that there is less chance of a production reduction in soybeans in the USDA’s upcoming estimate on October 12.
“The saying goes that large crops grow larger and smaller crops shrink, but that isn’t always true,” he remarked. The impact of heat and dryness was minimal because corn was already quite developed. However, it might still have an effect if it becomes wet during harvest, although that seems unlikely given that it doesn’t seem to be raining anywhere. The corn-soybean ratio—the quantity of corn needed to match the cost of one bushel of soybeans—is close to 2.9 to 1 compared to a normal level, reflecting the position of accumulating stockpiles for maize and a relatively tight balance sheet for soybeans span from 2.3 to 2.7 to 1.
The USDA projected the carryover of maize on September 1, 2024, at 2,221 million bus in its WASDE report. This is an increase of 19 million bus, or 0.9%, from August and an increase of 53% from a downwardly revised 2023 carryout of 1,452 million bus. A 23-million-bu increase in anticipated production more than offset a 5-million-bu reduction to beginning stock projections in order to account for the 2024 corn adjustment. As of September 1, 2024, the Department’s projection for soybean carryover was 220 million bus, which is a 10% decrease from August and a 30% decrease from the downwardly revised 250 million bus of 2023. A 70 million bushel reduction in overall supply and a 45 million bushel reduction in total use were included in the 2024 soybean carryout adjustment.
The average soybean yield on September 1st was predicted to be 50.1 bus/acre, down from 50.9 bus/acre in August but higher than 49.5 bus/acre in 2022. The projected harvested area was 82.8 million acres, which was 4% less than the 86.3 million acres in 2022 but up 0.1% from the August projection.
The corn yield estimate was 173.8 bu/acre, up 0.5 bu from 173.3 bu/acre in 2022 but down 1.8 bus from the August forecast of 175.1 bus/acre. The projected harvested area was 87.09 million acres, up 10% from 79.2 million acres in 2022 and up 0.9% from the August projection.
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While the USDA’s estimate of corn yield was higher than the trade average of 173.5 bus per acre, the USDA’s estimate of soybean yield was lower than the average pre-report trade projection of 50.2 bus per acre. The yield predictions for corn and soybeans would both be the highest in seven years.
The USDA increased its projection for China’s imports of soybeans in 2022–2023 to 102 million tonnes from 100 million tonnes in August and upped its expectation for China’s imports of soybeans in 2023–2024 to 100 million tonnes from 99 million tonnes in August in its monthly update of global supply and demand estimates.
The demand for Chinese imports is still rather high and impressive, according to Mr. Lapp.
Following the release of the reports, corn and soybean futures saw a decrease.
“The amount of corn acreage increase was greater than the trade anticipated, but the yield was within the range of expectations,” Mr. Lapp stated.
The United States was expected to produce 220,907,000 cwts of rice in 2023, up 38% from 160,368,000 cwts in 2022 and up 8% from 203,640,000 cwts in August.
Forecast sorghum output for 2023 was 381,220,000 bus, increasing 103% from 187,785,000 bus in 2022 but down 3% from 393,310,000 bus in August.