In a rare move this early in the US growing season, the USDA in its July WASDE report cut its forecast for US corn yield by 2.2% to 177.5 bushels per acre due to hot and dry conditions that have persisted in the Corn Belt this growing season.
Gro’s machine-learning Corn Yield Forecast Model, which has been projecting lower corn yields than the USDA’s estimate since June 1, predicts that the agency will still need to reduce its yield outlook further. Although recent rains have brought some relief to parched corn fields, “moderate” drought conditions persist, according to the Gro Drought Index weighted for corn area using Gro’s Climate Risk Navigator for Agriculture.
The USDA left its soybean yield estimate unchanged at 52.0 bu/acre. Gro’s US Soybean Yield Forecast Model indicates that this USDA forecast also will need to be lowered as the season progresses.
Despite the lower corn yield, corn production is forecast to increase slightly from last month’s estimate to a record 389 million tonnes (15.320 billion bushels) as higher planted acreage — previously reported in the agency’s June Acreage report — more than offsets the yield declines. The forecast corn production is up 12% from last year’s output.
Expected higher corn production is predicted to boost US corn ending stocks for 2023/24 to their highest level since 2016.
For soybeans, the USDA forecast production of 117 million tonnes (4.3 billion bushels), which is down 5% from last month’s estimate on reduced planted area as reported in the June Acreage report. 2023/24 soybean ending stocks are forecast down 14% from last month’s estimate, despite cuts to both export and crush demand.
A reduction in soybean yield estimates, as Gro’s yield forecast model currently predicts, would further weigh on soybean stocks, as Gro wrote about here.
Soybean exports for 2023/24 are seen dropping nearly 7% year over year to 1.850 billion bushels (50.4 million tonnes), flirting with the smallest levels since the 2018-19 trade war with China. Brazil’s relatively low prices are curtailing global demand for US exports of both soybeans and corn, as Gro wrote about here.
The total US wheat harvest is forecast to increase to 47.3 million tonnes (1.739 billion bushels) — up 5.4% from last year and a gain of 4% from the USDA’s estimate last month — due mostly to stronger yields in winter wheat.
However, the 2023 spring wheat crop is having a tough time, hit early by hot temperatures and now enduring a general lack of rain. Based on July 1 conditions, spring wheat yields are expected to average 45.2 bu/acre, down 1 bu/acre from 2022 on slightly higher year-over-year planted area.
The USDA also further cut its production outlook for Argentina’s drought-hit wheat crop — down 10.3% from the agency’s estimate last month. EU wheat production was lowered nearly 2% as ongoing dry weather diminishes yield prospects primarily in Germany, Spain, France, and Italy. In Canada, dry conditions in parts of Alberta and Saskatchewan lowered the country’s spring wheat production outlook by over 5% to 35 million tonnes.
In China, heavy rainfall late in the wheat season degraded grain quality, resulting in more of the crop going for animal feed use, as Gro wrote about here. The USDA increased its forecast for China wheat for feed use by 6% to 36 million tonnes.