USDA Trims South American Production, Raises U.S. Ending Stocks

OMAHA (DTN) -- USDA on Thursday released its February World Agricultural Supply and Demand Estimates (WASDE) and Crop Production reports.

USDA trimmed Brazilian corn and soybean production forecasts, although not as deeply on soybeans as some had predicted. Soybean production was lowered 1 million metric tons (mmt) from last month to 156 mmt. Corn production dropped 3 mmt to 124 mmt.

At the same time, USDA raised U.S. soybean ending stocks to 315 million bushels (mb), just above the range of pre-report expectations, with changes to export expectations accounting for much of the difference.

According to DTN Lead Analyst Todd Hultman, Thursday's new-crop U.S. ending stocks estimates were a little bearish for corn and soybeans but neutral for wheat. Meanwhile, world ending stocks estimates were a little bullish for corn, bearish for soybeans and neutral for wheat, he said.

CORN

The biggest changes in corn numbers were globally where USDA lowered corn production estimates for Brazil by 3 million metric tons.

U.S. production for 2023-24 crop was pegged at 15.342 billion bushels (bb), the same as January with the national corn yield at 177.3 bushels per acre (bpa), also the same as last month.

Ending stocks for the 2023-24 crop increased 10 mb to 2.172 billion bushels.

On the demand side, total 2023-24 Food, Seed and Industrial use is pegged at 6.78 bb, down 10 mb from January. Ethanol use is forecast at 5.375 bb. Total domestic use is forecast at 12.455 billion bushels, down 10 mb from last month.

Exports for the corn crop are pegged at 2.1 bb.

The farmgate price for the 2023-24 crop is $4.80 a bushel.

Globally, beginning stocks for the 2023-24 new crop were 300.25 mmt, down slightly. Production globally was lowered by 3.16 mmt to 1,232.57 mmt. Global exports came in at 200.82 mmt, down slightly from January. Global ending stocks for the 2023-24 crop are forecast at 322.06 mmt, down 3.16 mmt from January.

USDA dropped Brazil's production at 124 mmt, down 3 mmt from last month. USDA also lowered Brazil's exports 2 mmt to 52 mmt as well. Argentina's production was held pat at 55 mmt and export volume held pat at 41 mmt.

Ukraine's production was held pat at 30.5 mmt.

SOYBEANS

USDA increased ending stocks for the 2023-24 marketing year to 315 million bushels, up 35 mb from last month's estimate. The change was the result of a 35-mb cut to exports. USDA increased seed use by 1 mb while trimming the residual category by the same amount. The national average farm gate price dropped a dime to $12.65.

Globally, ending stocks climbed to 116.03 million metric tons, up 1.63 mmt from last month. The change was largely a result of higher beginning stocks, as USDA revised Brazil's 2022-23 production up 2 mmt to 162 mmt on higher yield and acreage. For the 2023-24 crop, which is currently being harvested, Brazil's estimate was lowered to 156 mmt, 1 mmt lower than last month. Production in Argentina was left unchanged at 50 mmt.

WHEAT

USDA estimates for 2023-2024 domestic wheat ending stocks were increased to 658 million bushels, from 648 mb in January. USDA estimated wheat exports at 725 mb, unchanged from last month.

The average U.S. farmgate price for wheat was pegged at $7.20 per bushel, unchanged from the January report.

Total use was estimated at 1.869 bb, a slight decrease from 1.879 bb in January.

USDA estimates world wheat production at 785.74 million metric tons, a slight increase from 784.91 mmt last month. World wheat ending stocks were estimated at 259.44 mmt, a decrease from 260.0 mmt in January.

Wheat production in Australia was estimated at 25.5 mmt, unchanged from January.

USDA estimates Ukraine exports at 15.0 mmt, a slight increase from 14 mmt in January. Wheat exports from Russia were left unchanged at 51.0 mmt.

LIVESTOCK

Thursday's WASDE report was rather encouraging for the cattle and beef markets in 2024. Beef production for 2024 was increased by 75 million pounds from a month ago, as the second half of the year's slaughter pace is expected to be more aggressive than originally thought. Quarterly steer prices were encouraging as all four quarters of 2024 saw a price increase from January's report. Steer prices in the first quarter of 2024 are now expected to average $176, which is $1 higher than a month ago. The second quarter is expected to average $180, which is $3 higher than a month ago. Third-quarter prices are expected to average $180, which is $2 higher than a month ago. And the fourth quarter of 2024 is expected to average $184, which is $1 higher than last month's prediction. 2024 imports were raised by 355 million pounds, as the reduced cow herd leaves fewer cattle to be marketed from our domestic herd. Oceania is expected to supply more imports. Exports for 2024 remained unchanged from January's data.

Thursday's WASDE report was favorable to both the lean hog and pork markets, according to DTN Livestock Analyst ShayLe Stewart. Pork production in 2024 was reduced by 90 million, as processing speeds have been slower than originally expected. Quarterly price projections were favorable for the market, Stewart said, as all four quarters of 2024 saw price increases from what was anticipated in January's WASDE report. Now, in 2024 first quarter, prices are expected to average $55, which is $4 higher than a month ago; second-quarter prices are expected to average $62, which is $2 higher than a month ago; third-quarter prices are expected to average $66, which is $1 higher than a month ago; and the fourth quarter in 2024 is expected to average $56, which is $1 higher than a month ago. Pork imports dropped by 20 million pounds from a month ago, while 2024 pork exports grew by 210 million pounds. 

WORLD PRODUCTION (million metric tons) 2023-24
	Feb	Avg	High	Low	Jan	2022-23
CORN
Argentina	55.0	55.7	57.0	55.0	55.0	34.0
Brazil	124.0	124.3	127.0	121.0	127.0	137.0
SOYBEANS
Argentina	50.0	50.8	52.0	50.0	50.0	25.0
Brazil	156.0	153.0	157.5	148.0	157.0	160.0
U.S. ENDING STOCKS (Million Bushels) 2023-24
	Feb	Avg	High	Low	Jan	2022-23
Corn	2,172	2,134	2,212	2,065	2,162	1,360
Soybeans	315	282	312	245	280	264
Wheat	658	649	673	623	648	570
WORLD ENDING STOCKS (million metric tons) 2023-24
	Feb	Avg	High	Low	Jan	2022-23
Corn	322.1	324.0	327.1	317.0	325.2	300.6
Soybeans	116.0	112.9	115.0	109.0	114.6	101.9
Wheat	259.4	260.1	262.0	257.0	260.0	271.6