WASHINGTON — January is typically an uneventful month for crop production data, but the markets were caught off guard after the US Department of Agriculture released a slew of reports on Jan. 12 showing surprising reductions in 2022 US corn and soybean production estimates.
The USDA estimated total corn production in 2022 at 13,730 million bus, down 200 million bus, or 1.4%, from the most recent November estimate and down 1,344 million bus, or 9%, from the 2021 estimate of 15,074 million bus. The January estimate fell below the full range of Reuters trade expectations and was the lowest estimate since 2012.
The corn yield, however, was raised 0.6% to 173.3 bus per acre, hitting the high side of the range of expectations. Despite the increase, harvested area was lowered, more than offsetting the small increase in average yield. While the number of acres planted to corn in 2022 earlier was trimmed to 88,579,000 acres, down almost 5 million acres from 93,252,000 acres planted in 2021, only 89% of the 2022 planted corn acres were harvested while 92% of the planted acres were harvested in 2021. Drought across parts of the western Corn Belt and Great Plains resulted in increased abandoned acres (unharvested) in 2022. Corn farmers harvested 1,455 million bus in Nebraska (down 22% from 2021 and 18% from the five-year average), 511 million bus in Kansas (down 32% from 2021 and 30% from the five-year average) and 119 million bus in Colorado (down 20% from 2021 and 23% from the five-year average). All three States saw significant declines in both yield and harvested area, the USDA said.
In the Jan. 12 World Agricultural Supply and Demand Estimates, the USDA reduced its forecast for the carryover of corn on Sept. 1, 2023, to 1,242 million bus, down 15 million bus from the December outlook and down 135 million bus from 1,377 million bus in 2022. The USDA also reduced its forecast for domestic use by 35 million bus to 11,990 million bus. Feed and residual usage was lowered 25 million bus to 5,275 million bus, and exports were reduced to 1,925 million bus, down 150 million bus, or 7%, from the December projection of 2,075 million bus.
Also challenging pre-report trade expectations was the revised US 2022 soybean production estimate. Many analysts expected the estimate to edge higher, but the USDA reduced the total estimate to 4,276 million bus, down 1.6% from its previous estimate of 4,346 million bus in November, and down nearly 190 million bus, or 4.2%, from the 2021 production estimate.
While the harvested soybean area fell within the range of trade expectations, the 2022 soybean yield did not. The USDA said the average yield was estimated at 49.5 bus per acre, down 0.7 bus from the November estimate, down 2.2 bus from 2021, and below the full range of trade expectations.
The USDA forecast the US carryover of soybeans on Sept. 1, 2023, at 210 million bus, down 10 million from its December projection, and down 64 million bus, or 23%, from 2022. The USDA also lowered its soybean export forecast to 1,990 million bus, down 55 million bus from the December outlook, and down 168 million bus, or 8%, from 2022.After the reports were released, both corn and soybean futures rallied and had yet to sink below pre-report levels as of Jan. 18.