Grain Market Update - January 2023

Jan 16, 2023

The USDA’s January report lineup is the largest deluge of data among all their report days. Thursday’s data from the Annual Crop Production, Supply and Demand, and Quarterly Stocks reports were all surprisingly on the bullish side, while the Winter Wheat Seedings report was bearish with an increase of 3.68 million acres planted.

Production, Supply and Demand

US corn production saw an unpredicted decrease of 200 million bushels (mbu) to 13.73 billion bushels due to a reduction of 1.6 million harvested acres. The feed use and export demand numbers were also lowered by 185 mbu, therefore reducing carryout by 15 mbu to 1.242 billion bushels.

On the US soybean balance sheet, production was also unexpectedly lowered by 70 mbu to 4.276 billion bushels from a decline in yield by 0.7 bpa. Exports and residual use demand were reduced by 60 mbu, dropping the carryout 10 mbu to 210 million bushels.

Looking at Ohio, the average corn yield was 187 bpa, down 6 from 2021. Acreage was down 5% at 3.18 million acres, creating a total of 595 million bushels of corn production for Ohio, down 8%.

Ohio’s average soybean yield came in at 55.5 bpa, down 1.5 from last year. Harvested acres were up 4% at 5.08 million, giving Ohio a total soybean production at 282 million bushels, up 1%.

Quarterly Stocks

The US stocks as of December 1, 2022, were all lower than the average trade estimates, adding to the bullishness of the day. Corn stored in all positions totaled 10.8 billion bushels, down 7% from last year. Of that total, 62% was on-farm while 38% was off-farm. Soybean stocks were 3.02 bbu, down 4% from a year earlier. On-farm soybeans accounts for 49%, with 51% off farm. Wheat in all positions were 1.28 bbu, also down 7% from December 1, 2021, with 28% on-farm and 72% off farm.

Locally, Ohio’s corn stocks were 516 million bushels, 4% below last year, with 67% on-farm. Ohio soybeans stored in all positions were 251 mbu, up 15% from a year ago. On-farm bushels account for 56% of Ohio beans. Wheat stocks in Ohio were 50 mbu, with 98% in commercial storage.

Winter Wheat Seedings

Total winter wheat planted is near 37 million acres, up 11% from last year. Soft Red Winter wheat accounts for 7.9 million acres, up 20% from a year ago. Ohio has planted 650,000 acres of SRW, an increase of 27%. As of November 27, the crop condition was rated 58% good to excellent, compared with 61% during the same period last year.

Up Next

Market traders will continue to keep a close eye on the South American growing season. Brazil is looking at a potential record-breaking soybean production, while Argentina is suffering from severe drought. Weather headlines and export demand will give direction to the nearby markets. Domestically, February brings the spring price discovery for 2023 crop insurance. Then March 31 is the next major report from the USDA - the Prospective Planting Report.

Spring is only 66 days away. Determine your planting intentions, calculate your costs, and take risk off the table by locking in profitable levels. Contact a grain merchandiser to discuss open target orders and contracting options.

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