The Department of Agriculture Wednesday lowered its estimates for soybean yields, production and exports for the 2022-23 marketing year while acknowledging that Brazil will likely have a much larger harvest early next year.
The new numbers, released in the monthly World Agricultural Supply and Demand Estimates report, helped push soybean futures prices higher.
“The trade was mostly surprised by the much smaller soybean yield than was anticipated … and now the market is worried how small this crop might get,” said Arlan Suderman, chief commodities economist for the StoneX Group.
USDA kept its estimate for harvested soybean area unchanged at 86.6 million acres, but cut yields to 49.8 bushels per acre, down from the September WASDE forecast of 50.5 bushels per acre.
“With lower production partly offset by higher beginning stocks, supplies are reduced 31 million bushels,” USDA said in the WASDE report. “Soybean exports are reduced 40 million bushels to 2.05 billion with increased competition from South America.”
Brazilian farmers are planting this year’s soybean crop now and the country’s National Supply Company, or CONAB, raised its production forecast last week to about 5.6 billion bushels. Wednesday's USDA report raised its forecast to meet the new CONAB prediction.
USDA also raised its crush forecast and that offset the new, lower prediction for U.S. exports, leaving ending stocks for 2022-23 unchanged at 200 million bushels.
USDA also made significant changes to its wheat outlook.
After cutting the size of its estimate for U.S. wheat production in the recent Small Grains report, USDA on Wednesday slashed its estimate for feed and residual use by 30 million bushels and cut its wheat export forecast by 50 million bushels.
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The new wheat ending stocks forecast for 2022-23 is 576 million bushels, down from the September prediction of 610 million.
Meanwhile, USDA also cut its forecasts for U.S. corn yields, production and exports.
The average corn yield is now seen at 171.9 bushels per acre, down from the September estimate of 172.5, and total U.S. corn production is expected to reach 13.895 billion bushels — a 49-million-bushel reduction.
“Corn supplies are forecast at 15.322 billion bushels, a decline of 172 million bushels from last month, as lower production and beginning stocks are partially offset by higher imports,” USDA said in the report. “Exports are lowered 125 million bushels reflecting smaller supplies and slow early-season demand.”
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