Good morning,

The USDA surprised everyone by reducing harvested acres by 1.6 million acres. This is the largest November to January acreage reduction on record. While harvested acres were lowered, the USDA did increase yield by 1 bushel per acre(bpa) to 173.3 bpa. Unfortunately, this yield increase was not enough to offset the acreage decline and we saw production fall by 200 million bushels.

As expected, we saw a reduction in demand that mostly fell in the export category. US exports were reduced by 150 million bushels while Feed and Industrial use were reduced by 35 million bushels.

The net result of the reduced production and decline in demand was an ending stocks number that was decreased by 15 million bushels. This is currently 8.9% stocks to use ratio which is considered bullish the markets.

The production numbers are final, and this is what we will be using on balance sheets for the balance of 2023. We could see additional changes on the demand side of the equation. There are two demand categories that I feel could be adjusted in the coming months. 1. Ethanol production is running 5% behind last years pace and the USDA failed to make any adjustments to corn use for Ethanol. I believe this should be 20-25 million bushel lower. 2. Following the adjustments in exports, we are still behind the USDA’s projected pace. If this trend doesn’t change, we could see another 150–200-million-bushel adjustment to exports.

January 12th WASDE

  January 12th, 2023 December 12th, 2022 Change
Planted Acres 88.6 88.6 0
Harvested Acres 79.2 80.8 -1.6
Yield 173.3 172.3 1
Beginning Stocks 1,377 1,377 0
Production 13,730 13,930 -200
Imports 50 50 0
Total Supply 15,157 15,357 -200
Feed Demand 5,275 5,300 -25
FSI Demand 6,715 6,725 -10
Total Domestic Demand 11,990 12,025 -35
Exports 1,925 2,075 -150
Total Use 13,915 14,100 -185
Ending Stocks 1,242 1,257 -15
Stocks/Use Ratio 8.9% 8.9% 0


Have a Safe Day!


Garry Gard