Prospect of meeting USDA corn, soybeans export targets is a coin toss: 2022 preview

Uncertainty for US soybean and corn producers when trying to meet USDA export targets

There’s still a big question mark when it comes to the prospects of US soybean and corn producers meeting USDA export targets, while the department’s wheat projections appear within easy reach.

“Exports for grains have always been expected to be below last year’s mark, mostly due to much higher prices and China having already rebuilt their stocks,” Ted Seifried of Zaner Ag Hedge told Fastmarkets Agricensus.

“However, I do believe it is too early to say that we will not reach the USDA’s expectations,” he continued.

The USDA’s January Wasde report is scheduled to be released on Wednesday. The following is the Agricensus view on some of the challenges facing the key export markets.

Corn projections

The USDA maintained its US corn export projections at 63.5 million tonnes for this marketing year in its most recent Wasde report, which was released on December 9.

US corn exports surged to a record 66.95 million tonnes in the previous marketing year.

This year’s estimates are ambitious, especially with variable factors at play like year-to-date figures, China, soybean competition, and exports from rival producers.

At this point in the prior marketing year, corn exports stood at 15.26 million tonnes, or 23% of the 2020-2021 total (66.95 million tonnes).

Looking at current numbers, exports are at 14.65 million tonnes, or 23% of this marketing year’s projected figure (63.5 million tonnes).

While the accumulated exports lag 4% behind last year’s figure, the current percentage is in line with that of last year that went on to become a record.

While corn “export shipments are behind the pace to hit the USDA’s target, export commitments (sales) paint a much more optimistic picture,” Seifried said.

“This is mostly due to outstanding sales to China that have not yet been delivered, but as long as they do not get canceled, corn has a legitimate shot to hit USDA targets.”

In the 2020-2021 marketing year, China overtook Mexico as the top corn export destination by volume, accounting for 32% of the total 66.95 million mt exported and displaying a 913% year-over-year increase.

By this time last year, China accounted for 7% of what would be the total export figure versus 4% now of the estimated 63.5 figure.

China is a key variable that can sway the pendulum either way, but as we start the new year, the country has not presented itself with the same magnitude.

Dry conditions in South America, which threaten to slash Brazilian production, may also bolster demand for US corn exports.

A “significant production loss could lead to an increase in US exports and the USDA expectations could conceivably be beat,” Seifried said.

Soybean exports

Soybean exports to date stand at 30.6 million tonnes, or 55% of the total estimated by the USDA in the December Wasde report.

At the same point last year, exports were at 38.9 million tonnes, or 63% of actual the marketing years’ total exports.

“We are looking for USDA to lower US soybean exports next week by at least 25 million bushels,” said Terry Reilly, Senior Commodity Analyst of Futures International.

“Obviously, South America will overtake the US for proving beans to the rest of the world.”

The US export window typically narrows at this time of year because Brazilian beans arrive at the country’s ports soon, but dry conditions in growing regions are also bolstering concerns about Brazil’s crop.

“While the typical window for exporting US soybeans is coming to an end relatively soon, export commitments have been catching up or at least moving in the right direction,” Seifried said.

“With concerns over the South American soybean crop, buying could accelerate counter-seasonally and give the US a chance to meet or exceed current projections in my opinion.”

Wheat on track

US wheat exporters are facing stronger competition from several sources, including southern hemisphere producers Australia and Argentina, which both have been on track to harvest a record crop.

“For wheat, it seems to be more of an uphill battle as global competition is strong and a relatively strong US dollar compounds the issue,” Seifried said.

The country’s wheat exports appear to be on track to meet USDA projections, which are lower than last year’s total.

At this time last year during the 2020-2021 marketing year US wheat exports stood at 14.38 million tonnes, or 53.3% of the full marketing-year total (26.99 million tonnes), according to USDA data.

Looking at current numbers, the export total amounts to 11.05 million tonnes, or 48.3% of this marketing year’s projected figure (22.86 million tonnes).

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