USDA surprised wheat markets in the June 2023 World Agricultural Supply and Demand Estimates report on Friday. Traders had been expecting a smaller hard red winter wheat crop after farmers are slated to abandon acreage due to drought at the highest rate since 1917, but recent rains in the Plains helped to revive late season production prospects.

Corn

USDA did not amend its initial corn area and yield forecasts, although the agency also noted it will release a key acreage report on June 30 that is populated with survey-based data for planted and harvested acres. USDA bumped up beginning stocks by 35 million bushels and lowered exports by 50 million bushels based on ongoing shipping data. There were not supply or usage changes for 2023/24, which meant ending stocks also increased by 35 million bushels. USDA’s season-average farm price was unchanged, at $4.80 per bushel.

In South America, USDA downgraded Argentina’s production potential to 1.378 billion bushels, which was lower than the average trade guess of 1.407 billion bushels. Brazil’s production potential is on the rise, in contrast, moving from 5.118 billion bushels in May to 5.197 billion bushels this month. That was a bit higher than the average trade guess of 5.155 billion bushels.

Globally, USDA pegs world 2023/24 corn ending stocks at 12.361 billion bushels, up from May’s tally of 12.319 billion bushels and above the average trade guess of 12.328 billion bushels.

Soybeans

Due to lower-than-expected exports, USDA notes higher beginning and ending stocks for 2023/24. Ending stocks are now expected to come in at 350 million bushels, up from 335 million in May and 5 million higher than the average trade guess. The season-average farm price is unchanged from a month ago, at $12.10 per bushel.

South American production continues to show Argentine production on the downward swing and Brazilian production trending even higher. Argentina is now only expected to harvest 919 million bushels of soybeans, while Brazil’s crop will rewrite the record books at 5.731 billion bushels.

World ending stocks for 2023/24 increased modestly to 4.532 billion bushels, which was a bit higher than the average trade guess of 4.482 billion.

Wheat

USDA upgraded its 2022/23 wheat production estimates to 1.665 billion bushels due to better prospects for hard red winter wheat production, with recent rains hopefully erasing at least some of the severe drought in some parts of the Plains. Average yields are expected to reach 44.9 bushels per acre, up 0.2 bpa from May. Ending stocks are now at 562 million bushels, up from 556 million bushels in May. The season-average farm price tilted 30 cents lower to $7.70 per bushel.

Globally, USDA expects larger supplies, more consumption, increased trade and larger stocks in 2023/24. Global ending stocks increased from 9.712 billion bushels in May up to 9.946 billion bushels – noticeably above the average trade guess of 9.723 billion bushels.

Click here for a look at the rest of USDA’s findings in today’s report.