US Corn Yield expectation cut, but ample new crop carryout still likely. – 08/14/2023
The USDA’s first crop survey of the season resulted in a 2+ bushel reduction in the National corn average yield. In the 1965-2022 period the August yield estimate had a 96% correlation with the final (January) estimate with a standard error of six bushels per harvested acre.
USDA reduced the projection for the 2023/2024 US corn carryover by just 60 million bushels as feed, FSI, and export projections for the new year were all reduced.
| US Corn Supply/Usage Million Bushels acres | ||||
| 2021/22 | 2021/22 | 2022/23 | 2023/24 | |
| USDA AUG | ||||
| Area Planted | 90.7 | 93.3 | 88.6 | 94.1 |
| Area Harvested | 82.3 | 85.3 | 79.2 | 86.3 |
| Yield per Harvested Acre | 171.4 | 176.7 | 173.3 | 175.1 |
| Beginning Stocks | 1,919 | 1,235 | 1,377 | 1,457 |
| Production | 14,111 | 15,074 | 13,730 | 15,111 |
| Imports | 24 | 24 | 35 | 25 |
| Supply, Total | 16,055 | 16,333 | 15,142 | 16,592 |
| Feed and Residual | 5,607 | 5,721 | 5,425 | 5,625 |
| Food, Seed & Industrial | 6,467 | 6,764 | 6,635 | 6,715 |
| Ethanol & by-products | 5,028 | 5,326 | 5,225 | 5,300 |
| Domestic, Total | 12,074 | 12,484 | 12,060 | 12,340 |
| Exports | 2,747 | 2,471 | 1,625 | 2,050 |
| Use, Total | 14,821 | 14,956 | 13,685 | 14,390 |
| Ending Stocks | 1,235 | 1,377 | 1,457 | 2,202 |
| Carryout/Usage* | 13% | 15% | 18% | 25% |
| * Excluding Feed Residual, August 2023 USDA Estimate & Projected New Crop | ||||
One key metric, the corn US corn carryover relative to crop year FSI + exports calculated to 25% compared to the average 19% in the previous 10 years. We have scattered the harvest time price range for December corn as a function of the ratio of carryover / (Food + industrial +exports). The studies suggest a $3.75 to $5.00 autumn price range for the December 2023 corn contract. The calculated price range assumes USDA’s August estimates.
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Price plotted for 2023 is the close for December 2023 corn on August 14, 2023.
The 2023 price is meant to reflect the relative position of the current price compared to histortical data.