The long-awaited May supply and demand was mostly as expected on corn production. The average U.S. corn yield was equal to the Ag Outlook Forum’s figure of 181.5 bushels per acre (bpa) for a crop projection of 15.265 billion bu (bbu). When this production is combined with old crop ending stocks of 1.417 bbu, it will give the U.S. a new crop starting inventory of 16.7 bbu, the highest volume since 2017/18. The only change to old crop balance sheets was a 75 million bu (mbu) decline in exports.

While new crop corn production forecasts are up, so are demand expectations. Total new crop demand is estimated to total 14.485 bbu, up 755 mbu from old crop. Feed and residual are a large part of this with added demand of 375 mbu. Exports are also expected to increase 325 mbu from this year. New crop ending stocks are projected at 2.22 bbu, an increase of 805 mbu from old crop. This is a comfortable stocks to use of 15.3 percent.

The USDA also held to the Forum data on soybean production with a 2023/24 yield of 52 bpa and a crop of 4.51 bu. The only change to old crop soybean demand was a 5 mbu increase to exports, putting ending stocks at 215 mbu. The USDA increased new crop crush 95 mbu from old crop and lowered exports by 40 mbu. Total new crop demand is forecasted to be up 55 mbu to put ending stocks at 335 mbu, an increase of 119 mbu. This is a stocks to use of 7.6 percent and approaching a level where price rationing is no longer needed.

More attention than normal fell on wheat balance sheets this month. No changes were made to old crop balance sheets, leaving ending stocks at 598 mbu. The 2023/24 average U.S. wheat yield was projected at 44.7 bpa and total production at 1.659 bbu. This was 130 mbu under the average trade guess due to high abandonment to winter wheat in the Southern Plains. The USDA trimmed new crop exports by 50 mbu but increased feed use by 15 mbu. New crop ending stocks on wheat are now projected at 556 mbu, the lowest volume in 16 years. This is a stocks to use ratio of 30.2 percent.

Global ending stocks came in higher than expected for the month. For 2022/23, global ending stocks are estimated at 297.4 million metric tons (mmt) on corn, up 2 mmt from April. Soybean ending stocks are projected at 101 mmt compared to 100.29 mmt last month. The world wheat carryout is estimated at 266.3 mmt, up from 265.05 mmt in April. The 2023/24 world ending stocks came in at 312.9 mmt on corn, 122.5 mmt on soybeans, and 264.3 mmt for wheat. The wheat figure was the most surprising of these as even though the total was within trade guesses, it will be the lowest world stocks to use since 2014/15. This comes even as world wheat production is forecast to be the highest on record at 789.8 mmt.

The USDA left its Argentine production estimates for this year unchanged with 27 mmt on soybeans and 37 mmt for corn. A considerable rebound in production is expected in Argentina next year with corn at 54 mmt and soybeans at 48 mmt. The USDA raised this year’s Brazilian crops by 1 mmt on soybeans and 5 mmt on corn. This puts the crop at 155 mmt and 130 mmt respectively. Large crops are expected in Brazil next year as well with 129 mmt on corn and 163 mmt for soybeans. Elevated acres and the absence of the La Nina weather pattern are forecast to benefit all South American production.

U.S. beef production for 2023 was bumped up 150 million pounds to total 26.92 billion. Pork production for this year was upped 20 million pounds to total 27.38 billion. The initial 2024 projections have beef production at 24.75 billion pounds and pork at 27.35 billion pounds. Beef exports were raised 89 million pounds for 2023 to total 3.22billion pounds. Pork exports are projected at 6.5 billion pounds, up 123 million pounds. Initial 2024 exports are estimated at 2.95 billion pounds on beef and 6.32 billion pounds of pork.

U.S. river systems are now fully open following the flooding that took place in April. We are still seeing some congestion on the rivers though as barge traffic starts to resume. Basis values on the river are not improving though as demand at the gulf is low. U.S. exports on a whole have slowed and what is leaving the country is through the Pacific Northwest. Interior basis values are soft as well as processors are not seeing export competition.

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