The following is a brief analysis by Krista Swanson, the lead economist for the National Corn Growers Association.
The United States Department of Agriculture released the December World Agricultural Supply & Demand Estimates (WASDE) report on Friday. Most United States grain and oilseeds estimates were unchanged from last month. Citing slow sales and shipments through early December and competition from other exporters, the USDA lowered corn exports for the 2022/23 marketing year by 75 million bushels resulting in an equivalent increase in projected ending stocks with no other changes on the corn balance sheet.
To dig into USDA’s assessment of slow sales, here is a look at corn export sales so far this marketing year. With data through Week 14 of the marketing year, weekly exports for 2022/23 are represented by the solid blue line. Exports to date in this year are notably trailing last year and the five-year average pace represented by the blue dashed and dotted lines. The export projection of 54.6 MMT in the November WASDE was very close to the 5-year average of 54.8 MMT, providing a good illustration of a pace to hit the export target. The lower projection of 52.71 MMT in the December WASDE is still beyond current pace, but this early in the marketing year there is time for a rebound in corn exports. Exports to China in 2022/23, represented by the solid red line, are ahead of last year and the previous five-year average as shown by the dashed and dotted red lines. China’s actions early in the week to lift COVD-19 restrictions may help bolster demand for corn and other commodities that use corn.
The marketing-year average farm price was also lowered by ten cents to $6.70 per bushel, with no changes made to acreage or yield. Given the projected yield of 172.3 bushels per acres, the change translates to a $17.23 per acre decline in expected revenue for farmers.
