FOCUS ON AG

Written by Kent Thiesse

Farm Management Analyst, Green Solutions Group
January 15, 2024
USDA PROVIDES A BEARISH WASDE REPORT ON JANUARY 12
The monthly USDA World Supply and Demand Estimates (WASDE) report released on January 12 was viewed
as “bearish” by most grain marketing analysts. The report showed some noteworthy adjustments to final 2023
corn and soybean production and supply numbers. The report also showed a slight increase in corn usage for the
coming year and a decrease in soybean demand, compared to a year earlier. The January WASDE Report is
often known as a “market mover”, and the market reaction following this report was a significant decline in
both corn and soybean prices on the Chicago Board of Trade (CBOT).

CORN
The final National Ag Statistics Service (NASS) 2023 Crop Production Report was also released on January 12.
The report estimated the final 2023 U.S. average corn yield at the record level of 177.3 bushels per acre, which
was increased by 2.4 bushels per acre from the December estimate. The 2023 corn yield estimate compares to
173.4 bushels per acre in 2022, the previous record U.S. yield of 176.7 bushels per acre in 2021, and 171.4
bushels per acre in 2020. Minnesota is estimated to have a final 2023 statewide average corn yield of 185
bushels, while Iowa is projected to have a final corn yield of 201 bushels per acre for 2023. Other estimated
average corn yields for 2023 included Illinois at 206 bushels per acre, Indiana at 201 bushels per acre, Ohio at
198 bushels per acre, Nebraska at 182 bushels per acre, Wisconsin at 176 bushels, South Dakota at 152 bushels
per acre, and North Dakota at 143 bushels per acre. The final 2023 corn yield was increased in all of the listed
States from the November yield estimate, except in North and South Dakota, which stayed the same.

The latest WASDE report showed a slight increase in the total 2023 U.S. corn production, which is now
estimated at the record level of 15.34 billion bushels. This is an increase of 108 million bushels from the
December estimate and is nearly 1.7 billion bushels above the 2022 corn production level. The latest USDA
report also put the total demand for corn usage in 2023-24 at just over 14.56 billion bushels, which is an
increase of nearly 860 million bushels from 2022-23 corn usage figures. Corn export levels are projected to
increase by 439 million bushels in 2023-24, along with increases in corn used for feed of 231 million bushels
and an increase of 199 million bushels in corn used for ethanol production in the coming year. The January
USDA report listed the total available supply of corn available at 16.727 billion bushels, which compares to
15.066 billion bushels in January of 2023.

USDA is estimating 2023-2024 U.S. corn ending stocks at 2.162 billion bushels, which is a 59 percent increase
from the final ending stocks in 2022-23. USDA was projecting 2022-23 corn ending stocks at 1.242 billion
bushels a year ago in the January WASDE report; however, the final 2022-23 ending stocks closed at an
estimated 1.36 billion bushels. The U.S. corn stocks-to-use ratio is now estimated at 14.8 percent for 2023-24,
which is a substantial increase from ratios of 9.9 percent in 2022-23, 9.2 percent in 2021-22, and 8.3 percent in
2020-21. The projected 2023-24 ratio is more comparable to corn stocks-to-use ratios of 13.7 percent in 2019-
20 and 14.6 percent in 2018-19. The increased level of the available corn supply could limit the potential for
extended rallies in the cash corn market in the coming months.

USDA is currently estimating the U.S average on-farm cash corn price for 2023-24 at $4.80 per bushel, which
is down $.05 per bushel from the December estimate. The USDA market year average (MYA) corn and
soybean price estimates for 2023-24 are the expected average farm-level prices for the 2023 crop from
September 1, 2023, to August 31, 2024; however, they do not represent estimated prices for either the 2023 or
2024 calendar year. The projected 2023-24 MYA corn price of $4.80 per bushel is a significant decline from the
final MYA prices of $6.54 per bushel for 2022-23 and $6.00 per bushel in 2021-22.The current projected MYA
price still exceeds other recent national average corn prices of $4.53 per bushel in 2020-21, $3.57 per bushel for
2019-20, $3.61 per bushel for 2018-19, and $3.36 per bushel in 2017-18
SOYBEANS
The latest NASS report projects the final 2023 U.S. average soybean yield at 50.6 bushels per acre, which was
an increase of seven-tenths of a bushel from the November yield estimate. The 2023 yield compares to recent
final U.S. average yields of 49.6 bushels per acre in 2022 and 51.7 bushels per acre in 2021. Total U.S. soybean
production for 2023 is estimated at 4.165 billion bushels, which is a decrease of 105 million bushels from final
2022 production level. The recent WASDE report estimates total soybean demand at 4.179 billion bushels for
the 2023-24 marketing year, which is a decline of 126 million bushels from 2022-23 soybean demand levels.
Soybean crush levels are expected to increase by 88 million bushels in the current marketing year; however,
soybean export levels are expected to be 237 million bushels lower than 2022-23 and 397 million bushels below
2021-22 levels.

The U.S. soybean ending stocks for the 2023-24 marketing year in the latest WASDE Report are estimated at
280 million bushels, which was an increase of 35 million bushels from the December WASDE report. The
projected 2023-24 soybean ending stocks are an increase of 16 million bushels from the 2022-23 carryout level
of 264 million bushels. The current projected ending stocks compare to other recent year-end carryout levels of
274 million bushels in 2021-22, 257 million bushels for 2020-21, 525 million bushels for 2019-20, 913 million
bushels for 2018-19, and 438 million bushels for 2017-18.

The soybean stocks-to-use ratio for 2023-24 is now estimated at 6.7 percent, which represents an increase from
6.1 percent in both 2022-23 and 2021-22 and 5.7 percent in 2020-21. The projected 2023-24 ratio remains fairly
tight and is considerably lower than soybean stocks-to-use ratios of 23 percent for 2018-19 and 13.3 percent for
2019-20. The rather tight soybean supply may offer some opportunities for some short-term rallies in cash
soybean prices in the coming months, especially if weather issues develop in South America or with the 2024
U.S. soybean crop, as well as if expanded soybean export opportunities emerge in 2024.

USDA is now projecting the U.S. average farm-level (MYA) soybean price for the 2023-2024 marketing year at
$12.75 per bushel, which was a decrease of $.15 per bushel from the December estimate. The estimated 2023-
24 U.S. average soybean price would be a significant decline from the final soybean MYA prices of $14.20 per
bushel in 2022-23 and $13.30 per bushel in 2021-22. The 2023-24 MYA price estimate is still considerably
higher than other recent yearly average soybean prices of $10.80 per bushel for 2020-21, $8.57 per bushel for
2019-20, $8.48 per bushel for 2018-19, and $9.35 per bushel for 2017-18.

Marketing Decisions
Many farm operators will tell you that grain marketing decisions are one of the hardest parts of farming, which
is especially true during periods of highly volatile markets such as we have experienced the past few years. A
year ago, December corn futures on the Chicago Board of Trade (CBOT) were near $6.00 per bushel for 2023
“new crop” corn, with local 2023 Fall harvest prices in Southern Minnesota near $5.60 per bushel; however, by
May the local harvest cash corn price had declined to below $4.70 per bushel. In January this year, local cash
corn bids in Southern Minnesota for the Fall of 2024 are near $4.25 per bushel. Similarly, CBOT November
soybean futures for 2023 were near $14.00 per bushel in January last year, with local harvest prices above
$13.50 per bushel for the Fall of 2023; however, by May the Fall harvest price had dropped below $12.00 per
bushel. Current local cash soybean bids for the Fall of 2024 in Southern Minnesota are near $11.00-$11.50 per
bushel.

In recent years, farmers had opportunities to begin selling their anticipated corn and soybean production early in
the year, with harvest prices that were in a profitable price range. This allowed farmers to sell some of the
projected crop production at profitable levels, in order to reduce risk. As we enter 2024, many farmers do not
have that same opportunity for the 2024 at the current corn and soybean harvest price levels. Many Midwest
farmers will have 2024 “breakeven price levels” near $5.00 per bushel for corn and $12.00 per bushel for
soybeans in order to cover direct and overhead expenses, which are above the current cash price offerings in
many areas.

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Note --- For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions
Phone --- (507) 381-7960; Email --- kentthiesse@gmail.com