The USDA increased the average U.S. corn yield from 171.9 bushels per acre (bpa) in the October balance sheets to 172.3 bpa this month, which caught trade by surprise. This pushed the U.S. crop 35 million bu (mbu) higher to a total of 13.93 billion bu (bbu). We did see an increase in feed and residual demand of 25 mbu, but ending stocks still increased to 1.182 bbu. This is a stocks to use of 8.3 percent. No changes were made to corn exports even though sales are well behind expectations.

Soybean production in the U.S. also increased this month, with the average yield going from 49.8 bpa last month to 50.2 bpa this month. Total production was also elevated by 33 mbu from last month and now stands at 4.346 bbu. As with corn, few changes took place to demand, with crush being bumped up by 10 mbu. This will leave the U.S. with a 220 mbu carryout, 20 mbu more than in October. This is still a tight 5 percent stocks to use and extends the need for price rationing.

The only change to domestic wheat balance sheets this month was an increase of 5 mbu for food demand. This was enough to cut ending stocks from 576 mbu to 571 mbu, which is still a comfortable 30.6 percent stocks to use.

On the global side the only significant change from October was an increase in the soybean carryout estimate, which is now at 102.2 million metric tons (mmt), up 1.7 mmt. Global corn reserves decreased slightly on the month and now stand at 300.8 mmt. The global wheat supply increased a minimal amount and stands at 267.8 mmt.

Beef and pork balance sheets were also updated. Beef production for 2022 is estimated at 28.35 billion pounds and for 2023 it comes in at 26.28 billion pounds. Beef exports were trimmed for 2022 by 290 million pounds to a total of 3.54 billion pounds. Beef exports for 2023 were unchanged at 3.07 billion pounds. Pork production for 2022 decreased 30 million pounds to total 27.12 billion pounds and 2023 production was unchanged at 27.35 billion pounds. Exports on pork were increased 190 million pounds for 2022 to a total of 6.4 billion and left unchanged for 2023 at 6.28 billion pounds. The average steer value for 2023 is now projected at $155.50 per hundredweight and hogs are at $66.75 per hundredweight.

Prior to the WASDE data being released, CONAB released its November production estimates on the Brazilian crops for the 2022/23 crop year. CONAB, the Brazilian version of the USDA, now projects a soybean crop this year of 153.5 mmt, up 1.1 mmt from October. CONAB predicts a corn crop this year of 126.4 mmt, down slightly from the 126.9 mmt estimate from last month. These crops are both much larger than the 125.5 mmt of soybeans and 112.8 mmt of corn that were grown in the 2021/22 season.

The debate between commodity supply and projected demand is staring to intensify. A major hindrance for the market recently has been lower than expected export sales. The real question is how much more demand the United States could see if buyers do start to surface. The current stocks to use on corn is in a rationing position at 8.3 percent. On soybeans the stocks to use is even more thin at just 4.5 percent. This means the U.S. cannot afford much more export demand on either, especially with strong domestic usage figures. While we need to limit our exports, we do not want them to totally stop, which will keep volatility at elevated levels through the rest of this marketing year and likely into next.

Trade is already starting to look forward to next year’s ending stocks and projecting sizable increases. This is especially the case on corn where some believe 2023/24 ending stocks could nearly double from this year. This is coming from thoughts we will see upward of 3 million more corn acres next year and a return to trend yields. Soybean carryout next year is also likely to increase, especially if South America produces the size of crop that is expected, and the U.S. share of global trade diminishes.

China has released its import data for the month of September. For the month, China imported 1.5 mmt of corn, 56.6 percent less than in September 2021. The country imported 370,000 metric tons of wheat, which was 42.2 percent less than a year ago. China’s soybean imports for the month came in at 7.72 mmt, a 12 percent increase from last year. Year-to-date Chinese imports stand at 18.46 mmt on corn, down 25.9 percent, soybeans are down 6.6 percent on the year at 69.04 mmt, and wheat imports total 6.6 mmt, down 12.8 percent. Year-to-date beef imports are up 11.8 percent at 1.94 mmt while pork imports are down 61.2 percent at 1.2 mmt.

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