USDA Reports Preview
USDA Christens New Year With 3 Reports Friday
At 11 a.m. CST on Friday, Jan. 12, USDA will issue a WASDE report with another review of corn and soybean production estimates for 2023, a Dec. 1 Grain Stocks report and Winter Wheat Seedings. Traders will likely be most interested in USDA's estimates of South American corn and soybean production.
CORN
For anyone who still finds it difficult to believe the U.S. just harvested a record corn crop given the adverse weather conditions of 2023, USDA's report of Dec. 1 corn stocks is the report to watch Friday. Dow Jones' survey of 17 analysts expects USDA to find 12.01 billion bushels (bb) of corn on hand as of Dec. 1, up from 10.821 bb a year ago and the most in five years, if true. If USDA's number supports the notion of a record crop, the likely culprits will be 94.9 million acres of plantings and the superiority of modern seed technology. If corn supplies fall short of expectations, a lot of farmers in the Western Corn Belt are going to be repeating a lot of "I told you so's."
In the WASDE report for corn, Dow Jones' analysts expect USDA to estimate 2.105 bb of U.S. ending corn stocks in 2023-24, based on record production of 15.221 bb. Both numbers are slightly less than USDA's December estimates and, if true, ending corn stocks will remain the highest in five years and will continue to be a bearish source of pressure on corn prices. Even though USDA's corn and soybean production estimates in January are often billed as USDA's "final" production estimates, all estimates are subject to possible five-year revisions, helping make sure good arguments never die.
On the demand side of corn, both ethanol and exports are off to good starts. So far in 2023-24, ethanol production is up nearly 5% from a year ago. Corn exports are up 26% from a year ago at this time, and more sales are waiting to be shipped.
Early planting has barely started for Brazil's safrinha corn crop, and the pace will pick up later this month. Brazil's crop agency, Conab, has estimated Brazil's corn production at 118.5 million metric tons (mmt), or 4.67 bb, down 14% from a year ago and will update that estimate Wednesday, Jan. 10. USDA's estimate has been stuck too long at 129.0 mmt, or 5.08 bb, and should come down in Friday's report. For world ending corn stocks in 2023-24, Dow Jones' survey expects USDA to lower its estimate from 315.22 mmt to 313.90 mmt, or 12.36 bb. Because of USDA's high estimate for Brazil, world ending stocks have the potential to come down more than the survey estimates.
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SOYBEANS
Before Friday's report, USDA has been estimating 245 million bushels (mb) of U.S. ending soybean stocks, an expectation for the tightest supply situation in eight years. With soybean exports down 18% from a year ago and prices falling to new six-month lows, it is fair to wonder if USDA will find more soybean stocks on hand than expected for Dec. 1. Dow Jones' survey is anticipating 2.982 bb of soybeans on Dec. 1, down from 3.021 bb a year ago and the second-lowest total in seven years.
In the WASDE report, it is a little surprising Dow Jones' analysts expect USDA to reduce its estimate of U.S. ending soybean stocks from 245 mb to 239 mb, still the lowest in eight years, if true. USDA's soybean production estimate of 4.129 bb is expected to slip slightly to 4.123 bb. As already mentioned, export sales have been disappointing, but the soybean crush is up 4% in the first four months of 2023-24 from a year ago, in line with USDA's estimated pace.
Dow Jones expects USDA to lower its snapshot estimate world soybean stocks from 114.21 mmt to 112.2 mmt, or 4.49 bb, but there is potential for an even lower estimate ahead, due to Brazil's adverse weather. USDA's 161.0 mmt soybean production estimate for Brazil is high and will get plenty of attention in Friday's report. Traders will have a choice between Conab's new estimate on Wednesday and USDA's new estimate on Friday, or they may opt to learn more about the harvest as it picks up in late January and February. USDA's 48.0 mmt production estimate for Argentina will also get attention and could see a small bump higher as crops are reported in good condition.
WHEAT
Dec. 1 wheat stocks represent the halfway mark in 2023-24 and will give the market a better sense of where U.S. supplies actually stand. It is no secret that U.S. wheat exports are dragging, down 12% in 2023-24 from a year ago at this time, according to USDA's latest weekly reports. If there is a surprise in Friday's numbers, it will be in domestic demand, the more hidden part of the market. Dow Jones' survey expects USDA will find 1.383 bb of U.S. wheat stocks as of Dec. 1, up from 1.312 bb a year ago and the third-lowest amount in 16 years, if true.
For U.S. ending wheat stocks, USDA's 659 mb estimate is expecting a slight tweak to 658 mb. USDA's world wheat estimates will get attention, but are also not expecting much change, a slight increase from 258.20 mmt to 258.30 mmt, or 9.49 bb. Southern production estimates for Australia and Argentina will get noticed but may not change much. Export estimates for Russia and Ukraine will also get attention, simply because of the war and Russia's dominance of world exports. Traders are already wondering how the new winter wheat crops will turn out for 2024-25, and that brings us to USDA's Winter Wheat Seedings report.
Analysts in Dow Jones' survey expect USDA to estimate fall winter wheat plantings at 35.9 million acres, down from 36.7 million acres last year. Because of wheat's lower prices, it is fair to wonder if actual plantings may come in less than expected. HRW wheat plantings are expected to drop from 25.7 million acres in 2023-24 to 25.2 million acres in 2024-25, SRW wheat acres are expected to drop from 7.4 million to 7.1 million, and white winter wheat acres are expected to stay at 3.6 million, the same as a year ago.
What USDA reports won't mention, but what the market already knows, is how much better soil moisture conditions are, especially for HRW wheat crops in the southwestern Plains this year. This week's winter storm also added significant moisture to many wheat areas that had been dry. Looking at Friday's reports, it is difficult to expect much price movement if USDA's estimates land close to expectations. It's the surprises, however, that make these reports interesting, and that's what DTN will be watching for on report day.
Join us for DTN's webinar at 12:30 p.m. CDT Friday, Jan. 12, as we go through the numbers and discuss USDA's latest estimates. Questions are welcome, and registrants will receive a replay link for viewing at their convenience.
Register here for Friday's January WASDE report webinar: https://www.dtn.com/….
| U.S. PRODUCTION (Million Bushels) 2023-24 | ||||||
| Jan | Avg | High | Low | Dec | 2022-23 | |
| Corn | 15,221 | 15,330 | 15,068 | 15,234 | 13,715 | |
| Soybeans | 4,123 | 4,162 | 4,074 | 4,129 | 4,270 | |
| WINTER WHEAT ACREAGE (million acres) 2024-25 | ||||||
| Jan | Avg | High | Low | 2023 | ||
| All Winter | 35.9 | 39.4 | 34.5 | 36.7 | ||
| Hard Red | 25.2 | 27.3 | 24.0 | 25.7 | ||
| Soft Red | 7.1 | 8.6 | 6.2 | 7.4 | ||
| White | 3.6 | 3.8 | 3.4 | 3.6 | ||
| QUARTERLY STOCKS (million bushels) | ||||||
| 12/1/23 | Avg | High | Low | 9/1/23 | 12/1/22 | |
| Corn | 12,010 | 12,380 | 11,070 | 1,361 | 10,821 | |
| Soybeans | 2,982 | 3,039 | 2,950 | 268 | 3,021 | |
| Wheat | 1,383 | 1,459 | 1,272 | 1,780 | 1,312 | |
| U.S. ENDING STOCKS (Million Bushels) 2023-24 | ||||||
| Jan | Avg | High | Low | Dec | 2022-23 | |
| Corn | 2,105 | 2,253 | 1,961 | 2,131 | 1,361 | |
| Soybeans | 239 | 270 | 215 | 245 | 268 | |
| Wheat | 658 | 681 | 630 | 659 | 582 | |
| WORLD ENDING STOCKS (million metric tons) 2023-24 | ||||||
| Jan | Avg | High | Low | Dec | ||
| Corn | 313.9 | 318.0 | 310.0 | 315.2 | ||
| Soybeans | 112.2 | 115.0 | 110.0 | 114.2 | ||
| Wheat | 258.3 | 261.1 | 257.0 | 258.2 | ||
Todd Hultman can be reached at todd.hultman@dtn.com
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