WASDE update: Unfavourable weather impacts US crop

The USDA lowered its 2023/24 US corn production estimates by 209m bushels to 15.11b bushels as adverse weather conditions early in the growing season impacted yields. This is slightly lower than the roughly 15.13b bushels the market was expecting. Meanwhile, both consumption and export projections were cut by 45m bushels and 50m bushels to 12.34b bushels and 2.05b bushels, respectively. As a result, 2023/24 US ending stock estimates were reduced by 60m bushels to 2.2b bushels, which was not too dissimilar to what the market expected.

For the global corn balance, 2023/24 ending stocks were revised down from 314.1mt to 311.1mt at the end of 2023/24, below the roughly 314mt the market was expecting. Global production estimates were lowered from 1,224.5mt to 1,213.5mt with supply falling in the US (-5.3mt), the EU (-3.7mt) and China (-3mt).

However, the agency increased its corn production estimate for Ukraine by around 2.5mt to 27.5mt. Despite this increase in supply, Ukrainian export volumes were left unchanged, likely given the uncertainty over how exports evolve after Russia pulled out of the Black Sea Grain Initiative.

For the US market, the USDA slashed its 2023/24 soybean production estimate from 4,300m bushels to 4,205m bushels due to lower yields. The market was expecting a number closer to 4,234m bushels. Lower supply led to a 25m bushel downward revision in export estimates, whilst domestic demand estimates were left unchanged at 2,426m bushels. As a result, the USDA reduced its 2023/24 US ending stocks estimate from 300m bushels to 245m bushels, which is below the roughly 260m bushels the market was expecting. As a result, the release was moderately supportive for soybeans.

For the global market, the USDA cut its 2023/24 ending stocks estimate from 121mt to 119.4mt, largely due to lower US supply. This is slightly lower than the roughly 120mt expected.

There were marginal changes in the US wheat balance. The agency cut its US production forecast by 5m bushels to 1,734m bushels for 2023/24. However, the USDA also cut its demand numbers, reducing domestic consumption and export estimates by 3m bushels and 25m bushels, respectively. As a result, 2023/24 ending stocks were increased from 592m bushels to 615m bushels, above the roughly 595m bushels the market was expecting.

The global wheat balance saw the USDA cut its global production estimates by 3.3mt, with reductions from the EU (-3mt), China (-3mt) and Canada (-2mt). However, a revision higher in Ukrainian wheat output (+3.5mt) helped to offset these losses. However, as we saw with corn, Ukrainian wheat exports were left unchanged, given uncertainty over how exports perform in the months ahead in the absence of the Black Sea Grain Initiative. As a result, Ukraine is forecast to carry higher stocks through the end of the season.