USDA Raises Corn, Lowers Soybean Production in July Report

Source: By DTN Staff • Posted: Tuesday, July 12, 2022

OMAHA (DTN) — With slightly higher corn acres, USDA on Tuesday bumped up corn production slightly to 14.5 billion bushels (bb), but lowered soybean production by 135 million bushels (mb) to 4.5 bb.

USDA increased Russia’s wheat production to 81.5 million metric tons (mmt), while leaving exports unchanged at 40.0 mmt. USDA decreased Ukraine’s wheat production to 19.5 mmt and held exports at 10 mmt from June’s estimate.

According to DTN Lead Analyst Todd Hultman, Tuesday’s new U.S. ending stocks estimates were slightly bearish for corn, but neutral for soybeans and wheat. Hultman pegged the world ending stocks estimates from USDA as a little bearish for corn, but neutral for soybeans and wheat.

Stay tuned throughout the morning and refresh this page often as we will be sending a series of updates with the important highlights from today’s reports, including commentary from our analysts.

You can also access the full reports here:

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— Crop Production: https://www.nass.usda.gov/…

— World Agricultural Supply and Demand Estimates (WASDE): http://www.usda.gov/…

CORN

With acreage bumped up by 400,000 acres to 89.9 million acres, USDA held pat on yield estimates at 177 bushels an acre. That pegged production at 14.505 bb, up 45 mb from June’s forecast.

USDA also increased old-crop ending stocks by 25 mb as well to 1.51 bb. That came from USDA lowering the 2021-22 feed and residual use by a corresponding 25 mb. Those number shifts increased total corn supply for 2022-23 by 70 mb to 16.04 bb

On the demand side, USDA held pat in usage. Feed and Residual use for the new crop also held at 5.35 bb. Feed, Seed and Industrial use was 6.820 bb. Ethanol usage for the 2022-23 crop is forecast at 5.375 bb, the same as las month.

Total domestic usage was the same at 12.17 bb.

Exports are pegged at 2.4 bb, also keeping with the June estimates.

Ending stocks for the 2022-23 crop was increased 70 mb to 1.47 bb

USDA also dropped the average farmgate price 10 cents to $6.65 per bushel.

Globally, USDA bumped up beginning stocks for 2022-23 by 1.36 million metric tons to 312.28 mmt. Production for 2022-23 was increased slightly to 1,185.90 mmt. Total exports for 2022-23 were lower at 182.57 mmt, down .10 mmt from June. Ending stocks are bumped up 2.49 mmt to 312.94 mmt.

On Ukraine, USDA pegged corn production at 25 mmt and exports at 9 mmt the same as June.

USDA also held pat on Brazil’s 2021-22 production at 116 mmt and Argentina’s production at 53 mmt.

SOYBEANS

USDA adjusted soybean planted acreage to 88.3 million, reflecting June’s report. The national average yield was pegged at 51.5 bushels per acre, unchanged from last month. As a result, new-crop production estimates totaled 4.505 bb.

For the 2022-23 (new crop) marketing year, USDA put ending stocks at 230 mb, down 50 mb from last month. The change reflects a 125 mb reduction in supply, a 10 mb reduction in crush estimates and a 65 mb cut to export estimates. The national average farm gate price was reduced by 30 cents to $14.40 per bushel.

Ending stocks for the 2021-22 (old crop) marketing year were 215 mb, even with pre-report expectation. The higher ending stocks estimate reflects a 10 mb decline in crush estimates. The national average farm gate price was left unchanged at $13.35 per bushel.

Globally, USDA lowered 2022-23 marketing year stocks to 99.61 million metric tons. The agency attributed the change to higher stocks in Argentina offsetting lower stocks in the U.S., Brazil and China.

For the old-crop marketing year, USDA increased ending stocks to 88.73 mmt, above the range of pre-report expectations, reflecting reduced crush and imports by China as well as increased soybean production, imports, crush and ending stocks for Argentina.

WHEAT

USDA increased its estimate of all wheat production to 1.781 bb, up from 1.737 bb in its June report and on the high end of pre-report estimates.

USDA estimates ending stocks for new-crop wheat at 639 mb, up from 627 mb in June and near the high end of pre-report estimates. Ending stocks for old-crop wheat were unchanged from June’s estimate of 660 mb.

Wheat farm-gate prices were dropped by 25 cents to $10.50 per bushel.

Winter wheat production is forecast at 1.20 bb, up 2% from the June 1 forecast but down 6% from 2021. As of July 1, the United States yield is forecast at 48.0 bushels per acre, down 0.2 bushel from last month and down 2.2 bushels from last year’s average yield of 50.2 bushels per acre.

Hard red winter production is estimated at 585 mb, is up 1% from last month. Soft red winter is estimated 376 mb.

Durum wheat production is forecast at 77.2 mb, up 107% from 2021. Based on July 1 conditions, yields are expected to average 40.3 bushels per harvested acre, up 16.0 bushels from 2021.

On wheat world ending stocks, USDA estimated an increase to 267.52 mmt in July from 266.85 mmt in June. This estimate falls within pre-report estimates.

LIVESTOCK

Tuesday’s WASDE report shared supportive news for the cattle and beef markets. Beef production is raised for the second half with lower expected carcass weights and lower third quarter slaughter, but that was more than offset by higher fourth-quarter slaughter. Beef production for 2022 grew by 15 million pounds from June’s report to total 27,922,000 pounds. The beef production forecast was lowered slightly in anticipation of lighter carcass weights in 2023, but the industry will know more next month as then it will have seen the USDA’s July Cattle Inventory Report, which will be released on July 22.

Beef production 2023 is anticipated to total 25,940,000 pounds. Quarterly prices didn’t change much for 2022, other than in the second and third quarters where gains were noted. Second quarter’s average price jumped $1.93 from last month to average $141.93, and the third quarter’s average price jumped to $139.00, $3.00 higher than June’s report. Beef import forecasts for 2022 and 2023 are unchanged from last month while the export forecasts are raised for both years on firm international demand. Beef export for 2022 grew by 75 million pounds and beef exports for 2023 grew by 40 million pounds.

Pork production is lowered on a slower-than-expected pace of slaughter in June and lower expected second-half carcass weights. Pork production for 2022 fell by 60 million pounds from June’s forecast to amount to 27,159,000 pounds. Pork production is raised based on 2022 second-half farrowing intentions reported in USDA’s Quarterly Hogs and Pigs report, and expectations that farrowings in the first half of 2023 will be modestly higher. Pork production for 2023 grew by 155 million pounds from last month to total 27,365,000 pounds. The second quarter is the only quarter in 2022 that changed from June’s report, and it grew by $0.58 to average $75.58. Pork import forecasts are raised for both 2022 and 2023 on the current pace of trade and firm U.S. demand. Pork imports for 2022 grew by 110 million pounds from a month ago, and 2023 pork imports grew by 185 million pounds. Exports are reduced for 2022 but expected strength in foreign demand early in 2023 supports a slight increase in exports for that year. Pork exports for 2022 fell by 45 million pounds, but 2023 pork exports grew by 5 million pounds.

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