US wheat production and ending stocks took it on the chin in the latest USDA assessment. But the agency has high hopes for record corn and soybean output in the 2023/24 season.
In its May WASDE report — the USDA’s first forecasts for the new US growing season — the agency estimated corn production will jump 11% year over year to 387.7 million tonnes (15.27 billion bushels), in part due to a 4% expected increase in acreage.
US corn ending stocks for 2023/24 are seen at a seven-year high, up 57% from the previous season. The USDA sees corn exports rising from last year’s depressed levels. The US share of global corn trade will increase slightly, but remain below the average of the past five years, it said.
For soybeans, the USDA projected production will increase 5.5% from last season to 122.7 million tonnes (4.5 billion bushels), helping to lift soybean ending stocks by 56% year over year to a four-year high. The agency projected record soybean crush levels, but weaker US exports as Brazil harvests a record crop.
The USDA’s rosy outlook for corn and soybean production assumes a strong rebound from last year in crop yields — up 4.7% for corn, and up 5.1% for soybeans — based on weather-adjusted historical trends and assuming normal planting progress and summer growing season weather.
By contrast, the outlook for US wheat is poor. The USDA forecast a big decline in US hard red winter wheat production for 2023/24, confirming Gro’s prediction that crop yields will plummet and abandonment will rise due to the punishing drought in the southern Plains. Gro’s Hard Red Winter Wheat Yield Forecast Model has been signaling the crop was in trouble since November.
Total winter wheat production will rise 2.4% year over year, on gains in soft red winter wheat output, the agency estimated. Winter wheat accounts for 70% of total US wheat production, with spring wheat making up the rest.
Spring wheat production for 2023/24 is projected to decline from last year as planted area falls to a 50-year low, but even that low estimate is in doubt. Only 24% of the crop was planted, well below the 38% five-year average, as of the latest weekly progress report.
The USDA reduced its estimate for 2023/24 US wheat ending stocks by 7% from last year to 15.13 million tonnes (556 million bushels), the lowest level in 16 years. The US wheat shortfall is bad news for already tight global wheat supplies, and as geopolitical tensions surround the Black Sea Grain Initiative, which is due to expire on May 18 unless it is renewed.
The USDA projected worldwide wheat production, excluding China, to decrease 0.1% from last year to 264.34 million tonnes, with production declines expected in the US, Russia, Ukraine, and Australia. Canada’s wheat harvest is forecast to jump 9.4% year over year on higher planted acreage, but ongoing dry conditions bear close monitoring. Argentina’s crop, currently being planted, is expected to increase 55%, although drought could hamper sowing.
As a result, the agency projects world wheat ending stocks, excluding China, to be down 2% from last year to the lowest level in 15 years. It’s important to note that more than half of global wheat stocks are held in China.
The USDA raised by 4% its projection for Brazil’s 2022/23 corn crop, compared to last month’s estimate, and slightly increased its forecast for Brazil soybeans.