By Karl Setzer

 The USDA made a slight increase to the U.S. corn crop in the January World Agricultural Supply and Demand Estimates report. The USDA now estimates the crop at 15.11 billion bu (bbu) compared to 15.06 bbu last month. Harvested acres were increased by 300,000, which led to this increase. This is a full 1 bbu larger than the previous year’s crop. U.S. corn carryout was estimated at 1.54 bbu, up from last month’s 1.49 bbu projection. The USDA increased ethanol demand by 75 million bu (mbu), but decreased exports by an equal amount.

The U.S. soybean crop is now estimated at 4.435 bbu for the 2021/22 marketing year, just above the previous estimate for 4.425 bbu. This was from a slight increase in yield to 51.4 bushels per acre, which was partially offset by a 100,000-acre decline in harvested acres. U.S. ending stocks on soybeans are now estimated at 350 mbu, 10 mbu more than the previous estimate. The only change to usage on soybeans was a 1 mbu bump to residual demand.

Wheat ending stocks were bumped higher in the January release to a 628 mbu total, compared to 598 mbu in December. The USDA lowered feed demand on wheat by 25 mbu and exports by 15 mbu. The most interest in wheat was on the winter seeding figure of 34.4 million acres, compared to estimates for 34.1 million in plantings. This is a sizable increase from the 33.6 million acres that were seeded a year ago.

Beef and pork production numbers were also updated. Beef production for 2022 is now forecast at 27.17 billion pounds, up 160 million pounds from last month. Pork production is estimated at 27.52 billion pounds, down 80 million pounds from the December estimate. The average steer value for 2022 is estimated at $136.75 per hundredweight, and hogs at $60.25 per hundred weight.

Beef exports for 2022 were left unchanged in the monthly report at 3.27 billion pounds. Pork exports are projected at an even 7 billion pounds for 2022, down 405 million pounds from last month as China continues to scale back on its imports.

The quarterly stocks numbers as of Dec. 1, 2021, were also released. The United States had 11.647 bbu of corn in storage, up from last year’s 11.29 bbu. Soybean inventory was also up on the year, coming in at 3.15 bbu compared to last year’s 2.95 bbu. Wheat stocks were considerably lower though, with an inventory of 1.39 bbu compared to 1.7 bbu last year.

More changes were noted to the global side of the supply and demand report. These were mainly from the USDA lowering Brazil’s corn crop by 3 million metric tons (mmt) and cutting the soybean crop by 5 mmt. The world corn carryout is now estimated at 303.1 mmt, down 2.4 mmt on the month. Global soybean carryout for the 2021/22 marketing year is now estimated at 95.2 mmt, well below the 102 mmt estimate in December. The world wheat carryout is now projected at 280 mmt this year, up slightly from the 278.2 mmt at the end of last year.

One commodity the United States is seeing elevated demand for is distillers grains. The United States exported 1.02 million metric tons of DDGs in November. This was down 7 percent from October, but the second highest volume for the month on record, and the highest total since 2013. Buyers are seeing DDGs as an alternative to other high-priced protein meals, including soy. Concerns over the ability of South America to supply needs are also benefiting DDG demand.

Domestic weather is already starting to become a market factor as well. The U.S. Plains have been in a drought since last year with very little relief being seen. Forecasters now believe this drought could expand into the U.S. Delta region as well as the Western Corn Belt. While this is not a major concern at this time, the closer we get to the spring planting the more attention it will receive. The wheat complex is watching this event the closest as not only could an ongoing drought impact the winter crop but spring production as well.

Trade is starting to increase its attention on what we may see for acreage in the United States this coming year. Ever since last year’s crops were harvested and input costs began to rally, talk of acreage shifting increased, with many analysts calling for less corn plantings. This is from nitrogen fertilizer values doubling and, in some cases, tripling from last year. So far seed dealers do not see this change though, with many reporting equal sales to a year ago. Any significant loss of acres will likely be in fringe areas of the Corn Belt where production has struggled in recent years to begin with.

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