By TODD HULTMAN
USDA's July World Agricultural Supply and Demand Estimates (WASDE) report doesn't typically touch yield estimates for corn or soybeans, but given this year's early drought throughout the Midwest, there is a good chance USDA will at least adjust the corn yield, in addition to following up on findings from its June 30 reports. The Crop Production report from NASS will provide an update of winter wheat crop estimates and both reports will be released at 11 a.m. CDT Wednesday, July 12, followed by prompt coverage from DTN and a free DTN webinar at 12:30 p.m.
CORN
In the July WASDE report, many want to know if USDA will change the yield estimate. The last time USDA changed the corn yield estimate in the July WASDE report was in 2012, a time when the U.S. Drought Monitor looked similar to today. In 2012, USDA lowered the corn yield from 166 bushels per acre (bpa) to 146 bpa, a bold early move. On Wednesday, I suspect USDA will -- but doesn't have to -- lower the corn yield estimate, but not as drastically as what we saw in 2012. The 14 analysts in Dow Jones' pre-report survey have a similar view, expecting USDA to reduce its corn yield from 181.5 bpa to 175.8 bpa. Analysts expect a 15.149-billion-bushel (bb) crop, based on USDA's June 30 planting estimate of 94.1 million acres.
You may recall USDA's June 30 report showed June 1 corn stocks at 4.106 bb, which was 155 million bushels (mb) less than expected and the lowest total for in nine years. Armed with that information, Dow Jones' survey expects USDA to lower its estimate of old-crop ending corn stocks from 1.452 bb to 1.406 bb -- a reduction that will also take into account corn's slow pace of export sales in 2022-23.
USDA's estimate of new-crop ending corn stocks is expected to be reduced from 2.257 bb in June to 2.166 bb in July, a combination of higher plantings, lower June 1 stocks and a lower yield. As mentioned above, the yield doesn't have to change, but should, given this year's early weather threat. Just what the yield should be, however, is up for a wide range of debate and won't have a lot of confidence yet, no matter what number USDA picks. I generally agree with Dow Jones analysts that something around 175 bpa is a good starting point for now.
The harvest of Brazil's safrinha corn crop is just starting to pick up and will get attention in Wednesday's report. USDA last estimated total Brazilian corn production at 132.0 million metric tons (mmt) or 5.20 bb in June and is expected to increase the estimate slightly to 132.8 mmt in July. Keep in mind Brazil's current crop is in the 2022-23 season and the new U.S. crop is in the 2023-24 season. USDA's estimate of world ending corn stocks for 2023-24 is expected to be reduced from 314.0 mmt in June to 312.4 mmt or 12.30 bb on Friday, an estimate that has a long way to go.
SOYBEANS
While corn's new estimates will revolve around USDA's higher-than-expected planting estimate of 94.1 million acres, USDA's new soybean estimates will be working with a lower-than-expected planting estimate of 83.5 million acres in 2023. Dow Jones' survey expects USDA to lower its yield estimate slightly, from 52.0 bpa to 51.4 bpa, resulting in a new soybean production estimate of 4.250 bb, down from 4.51 bb in June. I suspect USDA will leave the soybean yield estimate unchanged at 52.0 bpa, putting the new-crop estimate near 4.30 bb, but these are minor differences this early in the season.
Dow Jones' survey expects USDA to slightly increase its estimate of old-crop ending soybean stocks from 230 mb to 235 mb. USDA's report of June 1 soybean stocks came in 12 mb less than expected at 796 mb on June 30 and the demand estimates for soybeans are looking fairly stable in 2022-23.
For new-crop soybeans, Dow Jones expects USDA to reduce its estimate of ending stocks from 350 mb to 206 mb, the lowest in eight years, if correct. Because there is still plenty of time and demand is a long way off, I anticipate USDA will come in with an ending stocks estimate closer to 250 mb, leaving room for tighter supplies later in the season, if they prove out.
For world soybean stocks in 2023-24, Dow Jones expects USDA to lower its estimate from 123.3 mmt to 120.0 mmt, or 4.41 bb. With South America still months away from planting, there is plenty about 2023-24 we have yet to learn.
WHEAT:
This is the time of year when winter wheat harvests are getting more active in the Northern Hemisphere and with that comes greater attention on USDA's world crop estimates. In total, Dow Jones's survey expects almost no change with USDA's estimate of world ending wheat stocks going from 270.7 mmt in June to 270.8 mmt, or 9.95 bb, on Wednesday. Estimates for all the major wheat growing areas will be watched, including China and India and it is difficult to believe there won't be some surprises along the way.
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