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USDA's November WASDE May Note Demand Concerns
As corn and soybean harvests head to the final laps of fall, analysts do not expect much change in USDA's row-crop estimates, but export demand estimates may see further reductions, related to restricted barge traffic along the Mississippi River. USDA's next World Agricultural Supply and Demand Estimates (WASDE) and Crop Production reports are due out Wednesday, at 11 a.m. CST with DTN coverage shortly after 11 a.m. and a report webinar at 12:30 p.m.
CORN
One month ago, USDA lowered its estimate of the 2022 U.S. corn crop to 13.895 billion bushels (bb), based on a lower yield of 171.9 bushels per acre (bpa), due mainly to drought in the outer periphery of the Corn Belt. Dow Jones' survey of 20 analysts anticipates a repeat in November, looking for a 13.893 bb crop on the same yield of 171.9 bpa.
USDA's estimate of U.S. ending corn stocks in 2022-23, however, is expected to increase 40 million bushels (mb), from 1.172 bb to 1.212 bb, likely related to corn's slow early pace of export sales and to barge traffic problems brought on by low water levels on the Mississippi River that are not expected to improve significantly anytime soon. If true, U.S. ending corn stocks will still be the lowest in 10 years.
So far in 2022-23, corn export sales commitments only total 570 mb, less than half of where they were this time a year ago. Brazil's larger corn crop earlier this year contributed to the slow start in U.S. sales, as December FOB prices in Brazil are currently 13% cheaper than comparable prices in the U.S. With corn production limited from Ukraine, U.S. export business should pick up in early 2023. Meanwhile, the dry southwestern Plains begs for corn with cash bids above $7 and around the Texas Panhandle above $8. It will be interesting to see if USDA makes any adjustment to feed demand.
Dow Jones' survey expects USDA's estimate of world ending corn stocks to drop from 301.19 million metric tons (mmt) to 300.60 mmt, or 11.83 bb. The more important metric of world supplies excludes China and was last seen at 94.98 mmt, or 3.74 bb, the second-lowest total in nine years.
There doesn't seem to be much reason for USDA to change its estimate of Brazil's corn production in 2022-23 from 126.0 mmt, or 4.96 bb, yet. Early conditions have been generally favorable down South, except in Argentina where dry conditions could persuade USDA to reduce the corn production estimate of 55.00 mmt, or 2.17 bb.
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SOYBEANS
Similar to corn, Dow Jones' survey of analysts does not expect much change in USDA's soybean crop estimate, going from 4.313 bb in October to 4.324 in November with a yield of 49.9 bpa. USDA estimated soybeans were 88% harvested at the end of October, so there does not seem much room for surprise on the production side of the ledger.
Dow Jones' survey expects USDA to increase its estimate of U.S. ending soybean stocks in 2022-23 from 200 mb to 215 mb, not leaving much room for any changes on the demand side of the ledger either. If true, ending U.S. soybeans stocks will still be the lowest in seven years.
Unlike corn, the demand side of the soybean ledger has been active in early 2022-23 with the most profitable crush incentives on record giving soybean processors plenty of reason to keep buying soybeans. Soybean export sales are near last year's pace, and shipments are only down 7% from a year ago, as commercials are finding ways to keep beans moving, despite problems on the river.
Dow Jones expects USDA to slightly increase its estimate of world soybean stocks from 100.52 mmt to 100.90 mmt, or 3.71 bb. Brazil's current crop estimate of 152.0 mmt, or 5.58 bb, is probably safe this early in the season, and Argentina's estimate of 51.0 mmt or 1.87 bb may not change either, but dry conditions are an early concern in Argentina.
WHEAT
Wheat will have no new production estimates in Wednesday's report from USDA. Dow Jones' survey does expect a tiny increase in USDA's estimate of U.S. ending wheat stocks, from 576 mb in October to 577 mb in November, still the lowest U.S. ending wheat stocks in 15 years.
So far in 2022-23, U.S. wheat export commitments are nothing to brag about at 447 mb, down 6% from a year ago. USDA has set such a low bar for this season's exports it will be difficult for even wheat to disappoint.
Dow Jones' survey expects a small decrease in USDA's estimate of world ending wheat stocks for 2022-23, from 267.54 mmt to 266.70 mmt, or 9.80 bb, the lowest in six years. When we factor out China, however, USDA's October estimate of 123.18 mmt, or 4.53 bb, reveals the lowest available world wheat supplies in 15 years.
The war in Ukraine continues to present a difficult challenge for assessing wheat supplies in the region, and the risk of nuclear catastrophe remains high. All of USDA's estimates on Wednesday should be written in light pencil, and that is especially true for wheat while Russia remains a hostile force.
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Join us at 12:30 p.m. CST Wednesday, Nov. 9, as we discuss USDA's new estimates and what they mean for crop prices. We are also glad to field your questions. For those busy at 12:30 p.m., there will be a link provided to replay the webinar at your convenience. Register here for Wednesday's November WASDE report webinar: https://www.dtn.com/…
Also, did you know this year's DTN Ag Summit will be conducted virtually on the mornings of Dec. 12-13? Please join us for DTN Lead Analyst Todd Hultman's insights into how long these high crop prices will last and what to watch for in the year ahead. Full details available at www.dtn.com/agsummit.
| U.S. PRODUCTION (million bushels) 2022-23 | ||||||
| Nov | Avg | High | Low | Oct | 2021-22 | |
| Corn | 13,896 | 14,109 | 13,766 | 13,895 | 15,074 | |
| Soybeans | 4,324 | 4,413 | 4,261 | 4,313 | 4,465 | |
| U.S. AVERAGE YIELD (Bushels Per Acre) 2022-23 (WASDE) | ||||||
| Nov | Avg | High | Low | Oct | 2021-22 | |
| Corn | 171.9 | 174.5 | 171.0 | 171.9 | 176.7 | |
| Soybeans | 49.9 | 50.9 | 49.2 | 49.8 | 51.7 | |
| U.S. HARVESTED ACRES (Million Acres) 2022-23 | ||||||
| Nov | Avg | High | Low | Oct | 2021-22 | |
| Corn | 80.8 | 80.9 | 80.7 | 80.8 | 85.3 | |
| Soybeans | 86.6 | 86.8 | 86.5 | 86.6 | 86.3 | |
| U.S. ENDING STOCKS (Million Bushels) 2022-23 | ||||||
| Nov | Avg | High | Low | Oct | ||
| Corn | 1,212 | 1,390 | 1,050 | 1,172 | ||
| Soybeans | 215 | 296 | 185 | 200 | ||
| Wheat | 577 | 600 | 541 | 576 | ||
| WORLD ENDING STOCKS (million metric tons) 2021-22 | ||||||
| Nov | Avg | High | Low | Oct | ||
| Corn | 307.1 | 307.1 | 306.9 | 307.1 | ||
| Soybeans | 92.4 | 92.6 | 92.4 | 92.4 | ||
| Wheat | 276.0 | 276.0 | 275.9 | 276.0 | ||
| WORLD ENDING STOCKS (million metric tons) 2022-23 | ||||||
| Nov | Avg | High | Low | Oct | ||
| Corn | 300.6 | 306.0 | 289.0 | 301.2 | ||
| Soybeans | 100.9 | 104.0 | 99.0 | 100.5 | ||
| Wheat | 266.7 | 268.5 | 264.7 | 267.5 | ||
Todd Hultman can be reached at todd.hultman@dtn.com
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