The USDA’s monthly World Agricultural Supply and Demand Estimates (WASDE) report, which was released at 12 p.m. on Thursday, may have a lasting impact for the next several months on grain prices according to one market analyst.
“The bottom line is we don’t have as much corn, soybeans, and wheat in storage as we thought,” says Karl Setzer, Senior Commodity Risk Analyst with AgriVisor.
According to the USDA, quarterly grain stocks as of Dec. 1, 2022 for corn are at 10.8 billion bushels, which is underneath the average trade estimate range. Soybeans are at 3.02 billion bushels, which was at the bottom of the trade estimate range. Wheat is at 1.28 billion bushels below the estimate range.
“Not only did that cause the futures to trade higher after the report, especially on soybeans and corn, but it’s likely going to lead to a stronger basis across the United States as we’re going to start to see buyers all of a sudden have to push to get the coverage that they had and that they need,” according to Setzer. “This report could have a long tail in the market. I expect this to be something that we look at and trade all the way up until we get a little bit closer to that spring planting season.”
Also in the USDA’s report, this month’s U.S. corn outlook calls for reduced production, food, seed, and industrial use, feed and residual use, exports and ending stocks. Corn production is estimated at 13.730 billion bushels, down 200 million. Exports were reduced 150 million bushels to 1.925 billion, reflecting the slow pace of shipments through December, and the lowest level of outstanding sales as of early January since the 2019/20 marketing year. The season-average corn price received by producers is unchanged at $6.70 per bushel.
Soybean production is estimated at 4.276 billion bushels, down 69 million, led by reductions for Missouri, Indiana, Illinois, and Kansas. The soybean export forecast was reduced 55 million bushels to 2.0 billion. The U.S. season-average soybean price is projected at $14.20 per bushel, up 20 cents. The outlook this month calls for increased supplies, larger domestic use, unchanged exports, and lower ending stocks. The season-average farm price is unchanged at $9.10 per bushel.
The USDA will release its next monthly WASDE report on Thursday, Feb. 9.