Powerful export pageant from Brazil and Russia additionally developing headwinds for US corn, soybean and wheat within the months forward
1 November 2023
3 minute learn
Traditionally low water ranges at the Mississippi River, which strikes just about part america grain and oilseed exports, are restricting grain motion heading into top fall harvest season (Show off 1). Correspondingly top barge freight charges at the Mississippi River are additionally pressuring inside foundation values for corn and soybeans (Show off 2). As an example, downbound barge charges from Southern Illinois had risen from $12 in keeping with ton in July to $46 in keeping with ton in past due September. Blended with the energy within the greenback and strong export pageant from Brazil and Russia, america grain and oilseed export program faces primary headwinds within the weeks and months forward.
The marketplace’s consideration subsequent quarter turns to the planting of South The united states’s corn and soybean vegetation. Farmers in Brazil are suffering with dry soil prerequisites and a stressed out margin outlook on corn, which is predicted to drag planted corn acreage decrease. Soybean acreage, although, is predicted to proceed increasing.
Corn
Exceptional corn export gross sales get started the brand new crop yr main remaining yr’s gross sales tempo by means of 6.7% with a miles larger crop and as exports glide via routes outdoor of the Mississippi River. USDA these days estimates the 2023/24 US corn crop at 15.134 billion bushels, up 10.2% YoY. Conspicuously absent from the export gross sales ledger for US corn is China, with exceptional gross sales down 64.8% YoY. The combo of upper transport charges at the Mississippi River, energy in america greenback, aggressive choices for corn in South The united states, and political saber damn between america and China has critically restricted China’s purchasing passion in US corn.
USDA reported US corn inventories on Sept. 1 at 1.361 billion bushels, which was once significantly less than marketplace expectancies. The smaller finishing shares quantity for the 2022/23 crop yr indicated upper feed utilization, however ethanol bears the weight of preserving up corn call for. Corn intake for gas alcohol in July was once up 2% YoY as ethanol processors take pleasure in traditionally sturdy margins.
Soybeans
Soybean export gross sales also are slow within the absence of Chinese language call for, with general exceptional gross sales at the beginning of the brand new crop yr down 36% YoY. Chinese language gross sales are down 48% YoY. The smaller export tempo is balanced by means of the expectancy of a smaller harvest this autumn with america soybean crop pegged at 4.146 million bushels, down 3% YoY following a season of extended warmth and drought within the Midwest. Soybean shares on the finish of the 2022-23 advertising yr on Sept. 1 totaled 268 million bushels, down 2.2% YoY.
Even though the soybean export tempo stays torpid, home utilization is strengthening. Soybeans overwhelmed for crude oil in July totaled 185 million bushels, up 2.2% YoY, because the marketplace fills rising call for for renewable diesel.
Wheat
Wintry weather wheat planting is underway in america and acreage is predicted to be down fairly as costs languish underneath anticipated breakeven prices of manufacturing. Wintry weather wheat call for faces sturdy headwinds from document Russian exports and an abundant provide of corn competing for feed utilization (Show off 3). A brief Canadian spring crop has lifted gross sales of US exhausting purple spring (HRS), Chinese language call for has seemed for cushy purple iciness (SRW), whilst uncertainty over dry prerequisites in Australia and Argentina is elevating considerations of quick international wheat provides heading into 2024. US all wheat shares on Sept. 1 totaled 1.780 billion bushels, up 0.1% YoY.
