May WASDE Report – Record Corn Crop, Increased Soybean Production Suggest Bearish Marketing Year Ahead

By Bernt Nelson

The May World Agricultural Supply and Demand Estimates gives the first look at USDA’s supply and demand expectations for the newest marketing year since the USDA Agricultural Outlook Forum in February.

Corn

This was a bearish report for corn. USDA estimates corn planted for the 2023/24 marketing year will be 92 million acres, up 4% from 2022/23, when 88.6 million acres of corn were planted. USDA forecasts farmers will harvest 84.1 million acres of corn in 2023 with a trendline yield of ­­­­181.5 bushels per acre. This puts corn production projections in 2023 at 15.26 billion bushels, up 1.5 billion bushels, or 11%, from 2022’s 13.7 billion bushels. This would be 7% above the five-year average of 14.2 billion bushels and would be a record high. Something to consider will be how growing conditions affect yield. Higher than expected yields would make an already record crop bigger, while lower yields could bring corn back below record production levels. Both scenarios would likely result in market volatility.

On the demand side, for the new 2023/24 marketing year, USDA estimates ethanol use will be up slightly this year at 5.3 billion bushels. Corn export estimates for the newest marketing year are projected up 325 million bushels to 2.1 billion bushels, after an estimated 696-million-bushel decline this year from 2.47 billion bushels in 2021/22.

Soybeans

Soybean farmers are expected to plant 87.5 million acres of soybeans in 2023/24, unchanged from 2022. This was up nearly 5% from 2020. Soybean yields are projected at 52 bushels per acre for 2023/24 (up 2.5 bushels from the latest estimate for 2022/23) on 86.7 million acres harvested (up slightly). As a result, U.S. soybean farmers are projected to produce 4.51 billion bushels in the new marketing year, 5% above the current year’s latest estimate of 4.28 billion bushels, and 7% above the five-year average. These are bearish numbers for soybeans.

The continuing increase in soybean production for 2022/23 follows rising crush demand to meet a rapidly rising demand for soy-based diesel fuels. Though export demand dipped in 2021/22 to 2.14 billion bushels, it is projected to fall again in 2023/24 to 1.98 billion bushels, which is above the five-year average of 1.96 billion bushels. Demand for soybeans is expected to be up 56 million bushels for 2023/24.

Cotton

Cotton planting expectations for the 2023/24 marketing year are 11.3 million acres, 18% below the 2022 estimate. Farmers are projected to harvest 8.7 million acres, based on historical rates of abandonment and slightly improved soil moisture in the Southern Plains. USDA anticipates a 10% yield drop to 854 pounds per acre, which brings production estimates to 15.5 million 480-lb. bales, down 5.8% from the current year and about 9% below the five-year average.

Wheat

Wheat planted acres in 2023/24 are estimated at 49.9 million acres, up 9% from 2022/23’s 45.7 million acres. Yield is forecasted down 1.8 bushels per acre due to high levels of abandonment in Texas, Kansas and Oklahoma. The projected yield would generate wheat production of 1.66 billion bushels, a very slight increase on last year’s wheat crop, but about 7% below the five-year average of 1.79 billion bushels.