USDA expectations for larger crops places the forecast for 2023/24 US feed grain production at 402 million tonnes, up from 358 million in 2022/23. This leaves more for domestic feed needs.
In its Feed Outlook for May, the USDA said total supply of feed grains was projected at 443 million tonnes in 2023/24, which outpaces expected demand at 383 million tonnes.
ENDING STOCKS SEEN HIGHER
Ending stocks for feed grains was projected at 59 million tonnes, up 21 million from the previous marketing year. Feedgrain supply growth is driven largely by corn, and corn supply in 2023/24 was forecast at 16,707 million bushels, up from 15,147 estimated in 2022/23.
A larger corn crop and higher beginning stocks combine to bolster the total corn supply. Global coarse grain production for 2023/24 was projected at a new record of 1,509.5 million tonnes on rebounding US production combined with larger projected crops in Argentina, the EU and China.
Because of record-high corn production prospects, US corn exports in 2023/24 (October-September international trade year) were projected to represent 28% of the global trade share, up from 26% in 2022/23.
Overall global coarse grain trade was forecast to be higher in the new marketing year, driven by increased export projections for the US, Argentina and Brazil. However, part of this projection was forecast to be offset by lower projected exports from Ukraine and Australia. For 2022/23, Brazil corn production was increased five million tonnes.
DOMESTIC OUTLOOK
US 2022/23 corn exports were lowered to 1,775 million bushels, down 75 million from the April USDA World Agricultural Supply and Demand Estimates report.
Through March, US corn exports totaled 877 million bushels, according to data from the US Department of Commerce, Bureau of the Census. Corn exports through March sit well behind the 1,387 million bushels seen last year over the same period.
A good portion of the yearly decline comes from lower exports to East Asia, in particular China, but US corn exports show weaker flows to all regions of the world during the first seven months of the marketing year.
Additionally, total commitments of corn exports (accumulated exports shipped combined with remaining outstanding sales), from the USDA’s Export Sales Reporting Program, show 1,511 million bushels as of May 4, down from 2,302 million in 2022/23.
A recent spate of sales cancellations over the last three weeks presents a weaker story for corn exports during the rest of the marketing year, as the global market turns to other sources.
The drop in corn demand because of lower exports pushes old crop ending stocks up to 1,417 million bushels. With the current 2023 corn production forecast, new crop supply prospects are abundant.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $171.05 per cwt to $177.58, compared with last week’s range of $171.00 to $179.10 per cwt. FOB dressed steers, and heifers went for $270.67 per cwt to $274.36, compared with $271.48 to $278.17.
The USDA choice cutout Wednesday was down $1.32 per cwt at $298.15 while select was off $1.46 at $282.89. The choice/select spread widened to $15.26 from $15.12 with 101 loads of fabricated product and 19 loads of trimmings and grinds sold into the spot market.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.73 to $1.88 a bushel over the Jul corn contract, which settled at $5.61 1/2 a bushel, down $0.19 3/4.
The CME Feeder Cattle Index for the seven days ended Tuesday was $202.18 per cwt, down $0.04. This compares with Wednesday’s May contract settlement of $204.55 per cwt, down $1.15.