USDA Releases January Crop Production, WASDE, Grain Stocks, Winter Wheat Seedings Reports

OMAHA (DTN) -- USDA on Thursday lowered corn export demand by another 150 million bushels (mb), but USDA also cut corn production by 200 mb and lowered ending stocks for the crop.

USDA on Thursday released its January Crop Production, World Agricultural Supply and Demand Estimates (WASDE), quarterly Grain Stocks and Winter Wheat Seedings reports.

According to DTN Lead Analyst Todd Hultman, Thursday's U.S. ending stocks estimates were bullish for corn, soybeans and wheat. He pegged the world ending stocks estimates from USDA as slightly bullish for corn, slightly bearish for soybeans and neutral for wheat.

CORN

USDA made several significant changes to corn supply and demand.

Production for the 2022-23 corn crop was dropped 200 mb to 13.730 billion bushels (bb), the lowest in three years and below the pre-report average.

USDA increased yield by 1 bushel per acre (bpa) to 173.3 bpa, but USDA also cut harvested acreage by 1.6 million acres as well.

Total supply was held at 15.157 bb, marking the 200 mb decline in production.

Feed and Residual also at 5.275 bb, down 25 mb. Ethanol use was held pat at 5.275 bb. Total domestic use came in at 11.99 bb, down from 35 mb.

Export demand was cut to 1.925 bb, down 150 mb for the January report after a 75 mb cut in the December report.

Total use came in at 13.915 bb, down 185 mb.

All of those adjustments put corn ending stocks at 1.242 bb, down 15 mb from the December forecast.

The farmgate price was pegged at $6.70 per bushel, the same as last month.

Globally, USDA lowered 2022-23 corn beginning stocks by 1.14 million metric tons (mmt) to 305.95 mmt. Total production was lowered 5.93 mmt, to 1,155.93 mmt. Global ending stocks for 2022-23 were lowered 1.98 mmt to 296.42 mmt.

Brazil's production was lowered 1 mmt to 125 mmt for 2022-23. Argentina was cut 3 mmt to 52 mmt as well. Ukraine's production held firm at 27 mmt. Yet, USDA raised Ukraine's exports 3 mmt to 20.5 mmt.

SOYBEANS

Farmers produced 4.276 bb of soybeans in 2022, incorporating lower harvested acreage and a lower national average yield of 49.5 bpa. That's 70 mb less than previously forecast and below the range of pre-report estimates. The agency said the reductions came from Missouri, Indiana, Illinois and Kansas.

For the 2022-23 marketing year, USDA pegged ending stocks at 210 million bushels, down 10 mb from last month. USDA incorporated the lower production estimate but also cut export demand 55 mb and residual use by 4 mb to get to its lower stocks estimate. The agency said the export reduction reflects reduced supplies, lower import demand from China and a higher export forecast for Brazil. The national average farm gate price was $14.20 per bushel, up 20 cents from last month.

Globally, 2022-23 ending stocks climbed to 103.52 million metric tons, reflecting higher beginning stocks but also lower production, crush and trade. USDA raised Brazil's 2021-22 (old crop) production to 129.5 mmt, up 2.5 mmt from December. For the 2022-23 season, USDA bumped Brazilian production higher by 1 mmt to 153 mmt while cutting Argentina's production to 45.5 mmt from last month's estimate of 49.5 mmt. USDA also increased its estimate for China's domestic soybean crop by 1.9 mmt to 20.3 mmt. China's import demand was lowered by a corresponding 2 mmt.

WHEAT

USDA left wheat production unchanged at 1.65 bb for 2022-23, with a national average yield of 46.5 bpa.

The agency increased beginning stocks to 698 mb, up 29 mb from December's report. The agency increased seed demand by 3 mb and feed and residual use by 30 mb to 80 mb. Domestically that boosts use to 1.126 bb, up from last month's 1.093 mb estimate. Exports were left unchanged, putting ending stocks at 567 mb, down 4 mb from last month.

Globally, ending stocks increased by just over 1 mmt to 268.39 mmt. The agency left Russian and Australian production changed but increased Ukrainian wheat production by 0.5 mmt to 21 mmt. It increased Ukraine's export estimate by 0.5 mmt to 13 mmt.

LIVESTOCK

Thursday's WASDE report painted a supportive outlook for the 2023 cattle market. For 2023, beef production was raised by 170 million pounds, with the first quarter of the year being the most aggressive in terms of slaughter. Strong boxed beef prices will entice packers to continue to run aggressive chain speeds, but if boxed beef weaken, we could see chain speeds drastically reduced. Noting the quarterly price projections for 2023 was interesting as the first, second and third quarters are all expected to average $157, and the fourth quarter of 2023 is expected to average $162. Compared to last month, the first quarter of 2023 increased in price expectation by $4.00, the second quarter increased by $3.00, and the third quarter increased by $2.00. Beef imports for 2023 were raised by 50 million pounds (of which Brazil is expected to be the biggest supplier), but exports for 2023 remained unchanged from last month.

Thursday's WASDE report laid out a hopeful and mostly supportive outlook for the 2023 hog market. For 2023, pork production was increased by 135 million pounds as demand in the second and third quarters is expected to increase, which also affected quarterly price projections. For the first quarter of 2023, hog prices are expected to average $63, which is unchanged from last month. For the second quarter, hog prices are expected to average $71 which is $1.00 higher than last month. For the third quarter of 2023, hog prices are expected to average $69 which is $4.00 more than what last month's report depicted. Hog imports for 2023 were decreased by 395 million pounds, but exports for 2023 did increase by 70 million pounds.

QUARTERLY GRAIN STOCKS

Corn stored in all positions on Dec. 1, 2022, totaled 10.8 bb, down 7% from Dec. 1, 2021. Of the total stocks, 6.75 bb are stored on farms, down 7% from a year earlier. Off-farm stocks, at 4.06 bb, are down 8% from a year ago. The September to November 2022 indicated disappearance is 4.30 bb, compared with 4.67 bb during the same period last year.

Soybeans stored in all positions on Dec. 1, 2022, totaled 3.02 bb, down 4% from Dec. 1, 2021. Soybean stocks stored on farms totaled 1.48 bb, down 3% from a year ago. Off-farm stocks, at 1.55 bb, are down 4% from last December. Indicated disappearance for September to November 2022 totaled 1.53 bb, down 4% from the same period a year earlier.

All wheat stored in all positions on Dec. 1, 2022, totaled 1.28 bb, down 7% from a year ago. On-farm stocks are estimated at 362 million bushels, up 32% from last December. Off-farm stocks, at 918 mb, are down 17% from a year ago. The September to November 2022 indicated disappearance is 498 mb, 26% above the same period a year earlier.

WINTER WHEAT SEEDINGS

Farmers planted 37.0 million acres to winter wheat this fall, up 11% compared to last year and above the average pre-report estimate of 34.5 million acres.

USDA said area seeded to hard red winter wheat is expected to total 25.3 million acres, up 10% from 2022.

Soft red winter wheat area, at 7.9 million acres, is up 20% from last year.

Farmers planted 3.73 million acres to white winter wheat, a 3% increase from 2022.

In Kansas and Oklahoma, USDA said farmers planted 16,000 acres to canola, a 41% decrease from last year.