In its September WASDE report, the USDA cut its corn yield estimates to 172.5 bushels per acre and its soybean yield to 50.5 bu/acre, bringing both crops’ yield forecasts closer to projections that Gro’s machine-learning Corn and Soybean Yield Forecast Models have been making all season. Our models continue to point lower US corn and soybean yields, suggesting further USDA yield estimate reductions ahead.
The September WASDE is a highly anticipated report because it is the first USDA report that incorporates data from the USDA’s objective yield plots. Gro’s yield models, by comparison, do this each day, using daily satellite-based data and near real-time environmental and growing conditions, including vegetative health, soil moisture levels, and GFS 16-day forecasts.
The hot and dry conditions that persisted in the Corn Belt this growing season likely prompted the USDA’s latest corn and soybean yield revisions. In its report, the USDA also trimmed 500,000 acres off its August soybean planted-acreage estimate. For corn, decreased acreage added to the USDA’s production revision; this change was captured in the USDA’s recent FSA release, which Gro highlighted here.
All in, the USDA’s WASDE yield and acreage revisions push US corn production down to 354 million tonnes (13.944 billion bushels), the lowest level since 2019. On the soybeans side, this month’s report puts soybean production at 119 million tonnes (4.378 billion bushels).
Compared with last year, the USDA projected that US corn production will be down 7.8% or 19.2 million tonnes (756 million bushels) and that soybean production will decrease by 1.3%. This means that US corn ending stocks will fall to the lowest level in 10 years, while soybean ending stocks decline to lows last seen in 2015/16.
In this month’s WASDE, the 2022/2023 global production outlook for wheat was a bright spot. While Russian wheat production rose by 3% to a record 91 million tonnes this month, Ukraine wheat production increased 5% to 20.5 million tonnes.
World rice production is moving in a different direction, however. According to USDA, 2022/2023 world rice production has dropped 1% to 507.99 million tonnes this month, a 1.4% drop versus last year. While drought conditions in southern China shaved 2 million tonnes from China’s production estimate, an additional 2 million tonnes were trimmed from India’s rice production estimate this month because of continued dry conditions in the northeast region.
For India, where monsoonal rains in major rice-growing areas were below the 10-year average, this drop is the first rice production decline since 2015/16. India’s exports were also lowered due to the recently imposed export duties on specific varieties of rice. Meanwhile, in neighboring Pakistan, the USDA cut its production estimate by 500,000 tonnes to 8.4 million on expectations that August flooding reduced harvested area.
Overall, the USDA said that projected 2022/23 world rice ending stocks were reduced by 5 million tonnes this month to 173.6 million, or 6.4% below last year. This puts world rice ending stocks at their lowest since 2017/18, threatening to ignite inflation for yet another key commodity.