USDA lowered Brazilian soybean production by 2 million metric tons (mmt) to 161 mmt (5.9 billion bushels) in one of the few significant changes to crop production numbers. Despite lower production, USDA increased Brazil’s exports 2 mmt to 99.5 mmt.
On Friday, USDA released the World Agricultural Supply & Demand Estimates (WASDE) for December. The report offered few changes to domestic supplies and demand.
Farm Director KC Sheperd spoke with Allendale’s Rich Nelson about this latest report, who said the report was pretty quiet today as USDA often waits until the New Year to make major changes. Nelson said on the wheat side of things, USDA did lower their stock number by 25 million bushels. “Keep in mind China bought over 1 million tons this week. So kind of reflecting that. Now they have stocks at 659. They actually did have some light increases for the non US wheat producers on this on this report, some net increases. So that helped add maybe a little pressure for today’s discussion as far as price action.”
When it comes to the livestock numbers Nelson said the first half of 2024 may not be as dramatically tight in terms of supplies as was previously expected, “They did raise their 2024 beef production estimate, now about 26 billion pounds. So they still have a decline posted from last year but now only about 2% for the whole year. So as far as beef, we could say this kind of was expected given what’s been going on the feedlots in recent months.”
You can also access the full reports here:
— Crop Production: https://www.nass.usda.gov/…
— World Agricultural Supply and Demand Estimates (WASDE): http://www.usda.gov/…
WHEAT
USDA estimates U.S. wheat ending stocks at 659 mb, decreased from November’s estimate of 684 mb.
U.S. wheat use is estimated at 1.89 bb, increased from 1.86 bb in November.
Wheat exports were estimated at 725 mb, an increase from 700 mb last month. USDA estimates the farmgate price of wheat at $7.30, also a bump up from $7.20 last month.
Wheat world ending stocks were estimated at 258.20 mmt, down from 258.69 mmt in November.
USDA pegged global wheat production at 783.01 mmt, an increase from 781.98 mmt last month.
USDA estimates wheat production in Argentina at 15.0 mmt, unchanged from the November. Brazil’s production was estimated at 8.4 mmt, down from 9.4 mmt. Wheat production in Australia was estimated at 8.4 mmt, down 1 mmt from November.
USDA estimates wheat production in Russia at 90 mmt, unchanged from November. Ukraine wheat production was pegged at 22.5 mmt, also unchanged from last month.
Wheat exports from Russia were estimated at 50 mmt, left unchanged from last month, while USDA estimates Ukraine exports at 12.5 mmt, an increase from 12.0 mmt in November.
WHEAT
USDA estimates U.S. wheat ending stocks at 659 mb, decreased from November’s estimate of 684 mb.
U.S. wheat use is estimated at 1.89 bb, increased from 1.86 bb in November.
Wheat exports were estimated at 725 mb, an increase from 700 mb last month. USDA estimates the farmgate price of wheat at $7.30, also a bump up from $7.20 last month.
Wheat world ending stocks were estimated at 258.20 mmt, down from 258.69 mmt in November.
USDA pegged global wheat production at 783.01 mmt, an increase from 781.98 mmt last month.
USDA estimates wheat production in Argentina at 15.0 mmt, unchanged from the November. Brazil’s production was estimated at 8.4 mmt, down from 9.4 mmt. Wheat production in Australia was estimated at 8.4 mmt, down 1 mmt from November.
USDA estimates wheat production in Russia at 90 mmt, unchanged from November. Ukraine wheat production was pegged at 22.5 mmt, also unchanged from last month.
Wheat exports from Russia were estimated at 50 mmt, left unchanged from last month, while USDA estimates Ukraine exports at 12.5 mmt, an increase from 12.0 mmt in November.
CORN
In a report with few changes, USDA increased U.S. corn exports 25 million bushels (mb) to 2.1 billion bushels (bb).
Most corn numbers held pat. U.S. production for 2023-24 crop was 15.234 bb and yield remained at 174.9 bushels per acre.
Ending stocks for the 2023-24 crop remained at 2.156 bb.
On the demand side, Feed and Residual use came in at 5.65 bb. Total 2023-24 Food, Seed and Industrial use at 6.740 bb. Ethanol use was 5.325 bb. Total domestic use is forecast at 12.39 bb. Exports for the corn crop are pegged at 2.1 bb.
The farmgate price for the 2023-24 crop remained at $4.85 a bushel.
Globally, beginning stocks for the 2023-24 new crop were raised .88 mmt to 300.1 mmt. Production globally was raised 1.28 mmt to 1,222.07 mmt. Global exports were bumped up 1.84 mmt to 201.46 mmt. Global ending stocks for the new crop are forecast at 315.22 mmt, up .23 mmt.
Ukraine’s production was increased 1 mmt to 30.5 and Ukraine’s exports also were increased 1 mmt to 21 mmt.
Looking at global 2022-23 crop, Brazil’s production was held at 137 mmt and exports were held pat at 57 mmt. Argentina’s production was held at 34 mmt and Argentina’s exports were held pat at 23 mmt.
SOYBEANS
Brazilian soybean production was estimated at 161.0 mmt, a decrease from 163.0 mmt in November. Despite lower production, USDA increased Brazil’s exports 2 mmt to 99.5 mmt.
Total production for U.S. soybean remained at 4.13 bb, the same as November. The yield forecast was 49.9 bushels per acre, also left unchanged from last month.
Domestic ending stocks for 2023-2024 are forecast at 245 mb, unchanged from November.
The national average farm gate price was left unchanged at $12.90 per bushel.
Globally, USDA pegged world soybean stocks at 114.21 mmt, decreased from 114.51 mmt last month.
Argentina’s soybean crop is estimated at 48.0 mmt, which is unchanged from last month.
LIVESTOCK
The December WASDE report focused on stability through the end of 2023 when it comes to production levels in the beef market, but underlined the current concerns of increased 2024 production for beef production, which has already posted significant market pressure over the past few weeks. Beef production levels for the current year have been unchanged in the current report, but 2024 production levels increased 180 million pounds. This has caused a $1.75 per reduction in estimated 2023 price levels, but a significant $7 per cwt push lower in 2024 levels. Pork production levels have increased 25 million pounds in 2023 but are unchanged for 2024 estimates in the latest report. No changes developed in either 2023 or 2024 hog price levels in the latest report.
The expected beef production gain in 2024, combined with a 10-million-pound estimated increase in imports for the year from last month’s report, increases total supply by 190 million pounds from Novembers report. While 2023 total supply increased only 10 million pounds from last month’s report. A significant shift lower in 2024 exports of 100 million pounds from last month’s report is the biggest shift, although this increased overall total use projections significantly by 125 million pounds from last month.
Overall, the report confirms weakness in the beef and cattle markets, which have for the most part already been factored into the complex. It is expected that very little significant surprises will be seen due to the report, but this report does confirm concerns of growing supplies and pork export movement in the coming year.
