December corn futures finished today's session 14 1/2 cents higher at $6.42 1/4 and November soybeans were 5 3/4 cents higher at $14.54 1/4, while December wheat in Chicago was 3 3/4 cents lower at $8.22 1/2.
A lack of market interest ahead of the monthly WASDE and FSA acreage reports gave us weaker trade to start today’s session. While these numbers will undoubtedly impact today’s trade, we are already seeing more interest in the September release when field collected data will be used in production forecasts. Mixed weather forecasts added to the two-sided trade today as some models indicate we will see cooling temperatures across the Midwest with chances of precipitation. Others remain warm and dry which is still a concern for developing crops. The drought in the EU continues to expand and production forecasts are falling accordingly. We have seen a slight increase in country movement in some regions of the Corn Belt, mainly where basis values are firm and crop potential looks favorable. China resumed military training exercises near Taiwan overnight renewing concerns of a possible invasion and keeping markets on edge. We continue to see Ukraine corn shipments, but these are all smaller sized, and now some are being rejected due to poor quality.
The USDA lowered the national average corn yield to 175.4 bushels per acre (bpa) in the August WASDE report, a decline of 1.6 bpa from July. When combined with a decrease in harvested acres of 100,000, this lowered the US corn crop 146 million bu (mbu) to 14.36 billion bu (bbu). Old crop ending stocks were bumped 20 mbu higher to a 1.53 bbu total, mainly from a decrease in ethanol use. New crop ending stocks were lowered 81 mbu to a total of 1.388 bbu. Lower new crop production was partially offset by decreases in feed and export demand. The new crop stocks to use is now at 9.6% which is a rationing level.
On the soybean side, the USDA surprised trade by raising the yield by ½ bpa to 51.9 bpa average. This countered a decline in harvested acres of 300,000 to give us a crop of 4.53 bbu, a 26 mbu increase from July. The USDA trimmed 2021/22 soybean exports by 10 mbu to give us ending stocks of 225 mbu. This larger carryout combined with the larger new crop production to give is a 2022/23 carryout of 245 mbu, up 15 mbu from July. We did see an increase in new crop exports of 20 mbu to help with the larger inventory. Even with this increase in reserves, the stocks to use on soybeans remains a minimal 5.4%.
Changes to the US wheat balance sheets were minimal. Ending stocks on the 2021/22 crop year were left unchanged at 660 mbu. The average US yield was estimated at 47.5 bpa and harvested acres were lowered by 100,000. Ending stocks on wheat for 2022/23 were lowered by 29 mbu and now stand at 610 mbu, which is still an adequate volume.
Only minimal changes were made to global wheat and soybean ending stocks, even with a record wheat crop being forecast for Russia. The world wheat carryout for 2022/23 was steady at 267.3 million metric tons (mmt). The global soybean carryout was raised a minimal 1.8 mmt to a 101.4 mmt total, mainly from the larger US crop forecast. World corn reserves are forecast to decline 6.2 mmt to a total of 306.7 mmt. This is mainly from the sizable losses to EU production. Only minimal changes were made to Ukraine export forecasts which is what trade had been most interested in.
Beef and pork balance sheets were also updated with minimal changes. For 2022 beef production was nearly steady at 27.99 billion pounds, as was pork production at 27.08 billion pounds. For 2023 US beef production was raised 320 million pounds to a total of 26.27 billion pounds. High imports of cattle from Canada were part of the reason for this bump, with imports of fed cattle up nearly 47% on the year. Pork production was unchanged for 2023 at 27.52 billion pounds.
Export forecasts on US meats also favored beef over pork. US beef exports for 2022 increased 65 million pounds to a total of 3.56 billion pounds. For 2023 the USDA raised beef exports 40 million pounds for a 3.02 billion pound total. Pork exports for 2022 were lowered 2 million pounds to a total of 6.57 billion pounds. Pork exports for 2023 were unchanged at 6.515 billion pounds. The lack of Chinese business on pork is behind the lower export forecast.
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