USDA 2022-23 Grain and Oilseed Outlook
USDA Outlook: Record Corn Production, Higher Domestic Soybean Demand, Slightly Lower Prices
OMAHA (DTN) -- In its first forecast on the 2022-23 crops, USDA on Thursday, Feb. 24, pegged record corn production and record yield, but projected lower prices for corn and soybeans despite the current high futures markets for both crops.
Corn acreage for the 2022-23 crop at is pegged 92 million acres and soybean acreage at 88 million acres as USDA's Office of the Chief Economist released its first forecasts of the 2022-23 crops.
USDA released the Grains and Oilseeds Outlook as the department opens its USDA Agricultural Outlook Forum online on Thursday. The report offers the first look at how USDA sees the 2022-23 crop marketing year playing out.
It should be noted that the reports were produced before the overnight invasion of Ukraine by Russia that has led to spikes in prices for nearly all commodities globally. Corn, soybeans and wheat all spiked in overnight trading.
Looking at USDA's Outlook forecast:
USDA calls for record corn production at 15.24 billion bushels (bb), about 1% higher than the 2021-22 corn crop. Farmers will plant 92 million acres this spring and USDA projects a record yield of 181 bushels per acre (bpa).
With beginning stocks projected at slightly higher than a year ago, USDA forecasts total corn supplies at 16.805 bb.
USDA keeps total corn use for 2022-23 as "virtually unchanged from the 2021-22 crop with growth in domestic use essentially offset by lower exports. Feed, seed and industrial use is projected at 1% higher at 6.84 bb. USDA sees corn use for ethanol increases 75 million bushels (mb) to 5.4 bb, "based on expectations of growth in motor gasoline consumption."
Feed and residual use is unchanged at 5.65 bb, with some expectations of "declining cattle on feed numbers during the year."
Despite the turmoil in Ukraine happening now, USDA projects U.S. corn exports will be down 75 mb to 2.35 bb, "with expectations of increased competition from other exporters despite global trade growth and continued robust demand from China."
USDA projects corn ending stocks at 1.965 bb, up 425 mb from USDA's forecast for the 2021-22 crop, which is now pegged at 1.54 billion in the February World Agricultural Supply and Demand Estimates (WASDE). That would bring projected stocks-to-use for the 2022-23 corn crop at 13.2%, which would be highest since the 2019-20 crop.
Despite the current markets and the potential for a crop-insurance price protection floor coming in close to $6.00 per bushel next week, USDA's price forecast for the 2022-23 corn crop is pegged at $5 per bushel, about 45 cents lower than overall price forecasts for the 2021-22 crop.
Soybean production is pegged at 4.5 bb, up 1% from the 2021-22 crop "with higher planted acreage accounting for most of the increase. USDA projects planting at 88 million acres and yield is forecast at 51.5 bpa.
Soybean exports are projected for 2022-23 at 2.15 bb, up 100 mb from the 2021-22 crop. Exports are expected to be "relatively strong through the first half of the marketing year with the current drought in South America limiting their exportable supplies this fall." However, USDA is calling for "higher South American harvest expected in early 2023," leading to export competition in the second half of the U.S. soybean crop marketing year that "will likely limit additional U.S. gains."
Crush is projected to rise for the second year in a row to a record 2.25 bb, "largely driven by growing domestic demand for soybean oil and supported by meal demand growth." Tight global vegetable oil supplies and increased demand for biofuel feedstock in the U.S. will be key drivers for higher soybean oil prices and demand for domestic crush. USDA cited the planned expansion of renewable diesel capacity to meet federal and state biofuel mandates. "Competition for biofuel feedstocks as new renewable diesel producers enter the market will support soybean oil prices and lead to lower soybean oil for methyl ester and food, feed and other industrial uses."
That will also pull down soybean oil exports to 1.3 billion pounds, the lowest since 2005-06.
Soybean ending stocks for 2022-23 are projected at 305 mb, down 20 mb from the 2021-22 forecast.
The average farm-gate price for soybeans is projected at $12.75 per bushel, down slightly from 2021-22. Again, USDA projects lower prices even though the crop-insurance price protection level right now is closing in near $15 per bushel.
USDA is calling for higher wheat supplies with wheat production pegged at 1.94 bb on higher area and yield. Winter wheat seedings came in at 34.4 million acres and USDA is pegging total wheat acres for the 2022-23 crop at 48 million acres, up nearly 1.3 million acres from 2021-22 and the highest wheat acreage since 2016-17.
The all-wheat yield is projected at 49.1 bpa. A significantly larger crop also offsets lower beginning stocks to raise total 2022-23 supplies by 5% to 2.708 bb.
Total use will increase slightly to 1.977 bb, up slightly from 2021-22 but still below the five-year average. Domestic use is projected to lower modestly on lower feed and residual use "despite increased supplies as corn is expected to be more competitively prices during the summer months.
Higher exports are expected to offset lower domestic use with exports pegged at 850 mb.
Ending stocks are expected to come in at 731 mb, 13% higher than 2021-22 but still below the five-year aver.
The average 2022-23 wheat price is projected at $6.80 per bushel, down 50 cents from the 2021-22 crop.
The full USDA Grains and Oilseeds Outlook can be found at https://www.usda.gov/…
Chris Clayton can be reached at Chris.Clayton@dtn.com
Follow him on Twitter @ChrisClaytonDTN
(c) Copyright 2022 DTN, LLC. All rights reserved.