September 14, 2023

 

USDA cuts forecast for soybean production in 2023

 

 

The United States Department of Agriculture (USDA) lowered its forecast for US 2023 soybean production, yield and ending stocks in its September Crop Production and World Agricultural Supply and Demand Estimates reports.

 

At the same time, the department raised its forecast for 2023 corn production despite a lower yield estimate on an increase in expected harvested acres.

 

US 2023 soybean production was forecast at 4,146,036,000 bushels, down 1% from 4,205,450,000 bushels forecast in August and down 0.7% from 4,276,123,000 bushels in 2022. Corn production for grain was forecast at 15,133,911,000 bushels, up 0.2% from 15,110,787,000 bushels forecast in August and up 10% from 13,729,719,000 bushels in 2022, the USDA said in its September 12 Crop Production report.

 

"We're seeing the effects of August weather reflected in these numbers, a smaller decline in corn than soybeans, but that's to be expected," said Bill Lapp, founder and president of Advanced Economic Solutions. "Corn is more of a July crop, soybeans more an August crop in terms of when crops can be most adversely impacted by disadvantageous climatological conditions. Also, it appears more corn and soybean acres were planted in 2023 than previously thought."

 

The USDA soybean number was near the low side of the range of pre-report trade estimates and below the average guess of 4,146 million bushels. The USDA corn number topped pre-report trade estimates that ranged from 14,762 million bushels to 15,125 million bushels.

 

The risk of a production decline in the USDA's next estimate on October 12 is greater for soybeans than for corn, Lapp said.

 

In its WASDE report, the USDA estimated the carryover of corn on September 1, 2024, at 2,221 million bushels, up 19 million bushels, or 0.9%, from August and up 53% from a downward revised 2023 carryout of 1,452 million bushels.

 

Accounting for the 2024 corn adjustment was a five million bushels cut to beginning stocks estimates more than offset by a 23 million bushels increase in projected production. 

 

The USDA projected the carryover of soybeans on September 1, 2024, at 220 million bushels, down 25 million bushels, or 10%, from August and down 30 million bushels from a downward revised 250 million bushels in 2023. The 2024 soybean carryout adjustment reflected a 70 million bushels cut to total supply and a 45 million bushels cut to total use. 

 

Based on September 1 conditions, the average soybean yield was forecast at 50.1 bushels per acre, down from 50.9 bushels per acre in August but above 49.5 bushels an acre in 2022. Harvested area was forecast at 82.8 million acres, up 0.1% from the August forecast but down 4% from 86.3 million acres in 2022.

 

Corn yield was forecast at 173.8 bushels per acre, down 1.8 bushels from 175.1 bushels per acre as the August forecast but up 0.5 bushels from 173.3 bushels per acre in 2022. Harvested area was forecast at 87.09 million acres, up 0.9% from the August forecast and up 10% from 79.2 million acres in 2022.

 

The USDA soybean yield number was below the average pre-report trade forecast of 50.2 bushels per acre and the USDA corn yield estimate was above the trade average of 173.5 bushels per acre. Both corn and soybean yield forecasts would be the highest in seven years.

 

In its monthly update to world supply and demand estimates, the USDA raised its forecast for China's soybean imports in 2022-23 to 102 million tonnes from 100 million tonnes in August and raised its expectation for China's 2023-24 soybean imports to 100 million tonnes from 99 million in August.

 

"It continues to be the case that China's import demand is pretty strong and fairly impressive," Lapp said.

 

Corn and soybean futures declined after the reports were released.

 

"Yield was within the range of expectations, but the magnitude of the corn acreage increase was larger than the trade expected," Lapp added.

- Baking Business