The Department of Agriculture’s annual Crop Production report surprised traders with increases to the 2023 corn and soybean yield, pulling prices for both commodities lower in what could be the start of a longer trend.
The report put the nationwide 2023 corn yield at a record 177.3 bushels per acre, which contributed to a record 15.3-billion-bushel corn harvest. Soybean yields were also raised a bushel to 50.6 bpa, but overall production was cut 2% from 2022 figures and settled at 4.16 billion bushels.
Both figures caught commodity markets off guard, contributing to double-digit price declines in trading prices.
Allendale President Steve Georgy said the corn yield increase – 1.4% higher – is tied for the largest in this report for the last 20 years, something he attributed to timely rains late in the growing season.
U.S. Commodities President Don Roose told Agri-Pulse there “really wasn’t anything positive out of the report” for commodity prices.
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“Historically this is a report that – on average since 2007 – moves 13 cents up or down on corn the day of the report and 21 [cents] on soybeans, and you'd carry through that and into the next week,” Roose said, pointing to further price declines that could come in the next few trading days.
“There's just real no shortage of grain, and you're going to need some kind of a weather event to shorten up some of these larger stocks,” Roose said. “Ending stocks getting bigger, not smaller, and that's usually a negative, not a positive.”
Georgy also pointed to soybean ending stocks figures, up 35 million bushels to 280 million in the monthly World Agriculture Supply and Demand Estimates report also released Friday. Traders were expecting a figure closer to 245 million, he said.
The Crop Production report also noted a 69% increase in sorghum production in 2023 to 318 million bushels, an increase driven largely by drought. Rice production increased 36% to 218 million hundredweight on higher planted area – up 30% to 2.89 million acres – and a 264-pound increase in the average yield.
Cotton production was down 14% as yield and harvested area both came in lower than 2022 figures.
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