The November WASDE (World Agricultural Supply and demand estimates) was released today. Farm Director, KC Sheperd, visited with Allendale’s Rich Nelson about the latest report.
“A lot of us would suggest that perhaps USDA did more or less pass the buck in terms of making substantial changes to some of the areas in the ballot sheet,” Nelson said.
Production numbers, for the most part, Nelson said, have wrapped up, so on the next report in January, the focus will be on demand.
On the wheat side of things, Nelson said there were not any changes seen for production on this report, which he says is not uncommon.
“They laid low on the production side, they made moderate changes to food and seed, but they did not address maybe some moderate concerns about exports,” Nelson said. “So, in future reports, that might be adjusted.”
Production changes for wheat in Argentina were made, Nelson said, and lowered by 2 million tons, which was expected. A little surprise, he added, was that the USDA raised production estimates of Australia’s crop despite the excess rains received.
With headwinds such as barge traffic on the Mississippi and the Russia and Ukraine war impacting the markets, Nelson said wheat should not be affected in the short term.
“The positive side for wheat, at least, is we only ship out about 12 to 13 percent of our product out of the gulf, so far, this is only going to be a corn issue,” Nelson said.
Listen to KC’s full conversation with Rich Nelson below:
You can access full reports here:
WASDE Report Released November 9, 2022 https://www.usda.gov/oce/commodity/wasde/wasde1122.pdf
U.S. Crop Production Report Released November 9, 2022https://release.nass.usda.gov/reports/crop1122.pdf
USDA on Wednesday went against the pre-report estimates and slightly bumped up both corn and soybean production.
USDA increased corn production 35 million bushels (mb) to 13.93 billion bushels (bb). On soybeans, production was increased 33 mb to 4.346 bb.
USDA estimates U.S. wheat ending stocks at 571 mb in November, a slight drop from October’s estimate of 576 mb. It is still the lowest U.S. ending wheat stocks in 15 years.
U.S. wheat use is estimated at 1.87 bb, up from 1.86 bb in October.
Wheat exports were left unchanged at 775 mb. USDA left the farmgate price of wheat at $9.20.
Wheat world ending stocks were estimated at 267.8 mmt, an increase from 267.5 mmt in October.
USDA estimates global wheat production at 782.7 mmt, up from 781.7 mmt in October.
USDA estimates wheat production in Argentina at 15.5 mmt, down from October estimates. Wheat production in Australia was estimated at 34.5 mmt, an increase from last month. Argentina has been suffering from dry conditions while eastern Australia has seen flooding.
Wheat production in Russia was left unchanged at 91 mmt. Ukraine wheat production was left unchanged at 20.5 mmt. Wheat exports from Russia were unchanged at 42 mmt, as were Ukraine exports at 11 mmt.
World wheat ending stocks were raised minimally, from 267.5 to 267.8 million tonnes. Increases were noted for Australia. Despite excess moisture concerns they were raised by 1.5 mt. Other increases were noted for Kazakhstan and the UK. The trade would certainly agree with their 2 mt decline for Argentina to now 15.5 due to dryness
Production for the 2022-23 corn crop was pegged at 13.930 bb, a three-year low. USDA increased the yield by .4 bushels per acre (bpa) to 172.3 bpa. That went against the average expectations in pre-report estimates.
Total supply was increased to 15.357 bb with the rise in production.
USDA also increased Feed and Residual use by 25 mb to 5.3 bb. Total domestic use was bumped up by that 25 mb to 12.025 bb.
On exports, USDA also surprised the trade expectations by holding firm at 2.15 bb, despite lower-than-normal export sales.
Total use came in at 14.175 bb. That put ending stocks at 1.182 bb, up 10 mb from last month.
The farmgate price was pegged at $6.80 per bushel, the same as October.
Globally, USDA bumped up 2022-23 beginning stocks by .67 million metric tons (mmt) to 307.68 mmt. Total production was lowered slightly, .35 mmt, to 1,168.39 mmt. Global ending stocks for 2022-23 were lowered .43 mmt to 300.76 mmt.
Brazil’s production was held firm at 126 mmt for 2022-23. Argentina was held at 55 mmt as well. USDA lowered production from South Africa by .6 mmt to 16.70 mmt. Ukraine’s production was maintained at 31.5 mmt and exports at 15.5 mmt, the same as October.
USDA boosted the national average soybean yield to 50.2 bpa while leaving harvested acreage unchanged at 86.6 million. The higher yield translated into a 33-million-bushel boost in production to 4.346 bb.
On the demand side, USDA sees higher crush, by 10 mb, but left all other categories unchanged. Ending stocks for 2022-23 increased to 220 mb, up 20 mb from October’s estimates. The national average farm gate price was left unchanged at $14 per bushel.
Globally, USDA raised 2022-23 ending stocks by 1.65 mmt to 102.17 mmt. To arrive at that number, USDA raised beginning stocks, which are also ending stocks for the 2021-22 marketing year, by 2.29 mmt to 94.67 mmt.
USDA reduced its forecast for Argentina’s upcoming soybean crop by 1.5 mmt to 49.5 mmt but left Brazilian production unchanged at 152 mmt.
New crop world stocks were raised from 100.5 to 102.2 million tonnes. Delayed soybean planting and the current moisture profile encouraged them to lower Argentina by 1.5 mt to now 49.5. There were no changes for estimates of China.
Wednesday’s WASDE report was mostly supportive for the cattle and beef markets. Beef production for 2022 was raised by 211 million pounds, as aggressive throughput on fed cattle, combined with heavier carcass weights, contributes more beef to the market. Beef production for 2023 was decreased by 90 million pounds as the market expects fewer cows to be slaughtered and there to be tighter fed cattle supplies. Quarterly steer prices for 2022’s fourth quarter jumped by $4.00 from last month to average $152.00. First-quarter 2023 steer prices are anticipated to average $153 (up $2.00 from last month) while second quarter prices in 2023 are anticipated to average $154 (also up $2.00 from last month).
Beef imports for 2022 fell by 13 million pounds, but exports also fell by 29 million pounds as the Asia markets aren’t expected to buy as aggressively through the end of the year. Beef imports for 2023 remained steady at 3,350 million pounds and exports held steady at 3,070 million pounds.
Wednesday’s WASDE report shared mostly supportive news for both the pork and hog markets. Pork production for 2022 was decreased by 27 million pounds as recent production speeds have waned. Quarterly hog prices for the fourth quarter of 2022 gained $1.00 from last month to average $64.00. Hog prices in the first quarter of 2023 are expected to average $63.00, and prices in the second quarter of 2023 are expected to average $71.00, both of which were steady with last month’s report. Pork imports for 2022 fell by 53 million pounds, exports grew by 20 million pounds. For 2023, pork imports fell by 95 million pounds, but exports remained steady.