January WASDE: Drawn and Quartered

We’ve just released our take on the USDA’s January 2023 WASDE report.

Report highlights

 Soybeans – Bullish – Poor US harvest overshadows Brazil’s bumper crop, weaker China demand rebound

US December 2022 soy stocks fell 4% to 3.02bn bushels vs expectations for a slight rise. The USDA lowered US 2022/23 acreage and yield, but even healthy cuts to exports (on anticipation of Brazilian competition and lower China demand) left ending stocks -10m bu MOM, to 210m bu.

South American exporters’ 2022/23 soy production was cut 3.2m mt MOM, on Argentina drought, but offsetting rises in China and Brazil’s 2021/22 production actually raised world carry-out 0.8m mt MOM and 5.1m mt YOY.

Corn – Bullish – US 22/23 big demand cuts can’t quell shock from falling acreage, ending stocks

US December stocks came in at 10.8b bu, down 7% YOY and well below expectations. US harvested acreage was cut to reflect lower production, and even enormous demand cuts in exports and feed couldn’t prevent carry-out falling 15m bu MOM to a paltry 1.24bn bu.

2022/23 Ukraine exports rose 3m tons, relieving pressure on US supplies and buying time for Brazil’s export bound production to come online. With Argentina’s crop revised down 3m tons, Global 2022/23 ending stockpiles are seen down nearly 10m tons YOY.

Wheat – Slightly bearish - The USDA forecast an impressive 37 million acres of US winter wheat surpassing analysts’ expectations, This represents the highest acreage since 2015.)

The report raised US feed/seed and residual use by 30mbu and domestic demand by 33mbu which contributed to lower US ending stocks (-4mbu).

Download previous editions