October 2023

Exports remain a drag

While there are plenty of differences between last year’s outlook and this year’s, one thing has not changed, international sales have been weaker than average. The September and October USDA reports incorporated new acreage information from the USDA Farm Service Agency (FSA) and new survey data from National Agricultural Statistics Service’s (NASS) farmer and objective yield surveys. For both crops, USDA’s new estimates indicate more acreage and less yield. The national corn planted area estimate was raised to 94.9 million acres, 6.3 million more acres than last year. The national average corn yield estimate dropped to 173 bushels per acre, just slightly below last year’s level. Putting together the acreage and yield updates, USDA found evidence to keep the corn production estimate north of 15 billion bushels for the year. That puts this year’s production over 1 billion bushels above last year and within 10 million bushels of the 2021 total. Similar supply changes were observed in the soybean market. Nationally, USDA slightly increased total planted area for soybeans to 83.6 million acres, down nearly 4 million from 2022. The national average soybean yield estimate came in at 49.6 bushels per acre, on par with last year’s yield. Overall, the projection for national soybean production is 4.104 billion bushels, which is a large crop, but not quite as large as last year.

USDA also updated corn usage, with cuts impacting the major usage categories. The September Grain Stocks report set the 2022-23 corn ending stocks at 1.361 billion bushels, 90 million bushels below the previous estimate. Thus, USDA made several adjustments to get the corn balance sheet to balance out. They started with small adjustments to 2022 supplies, lowering production by 15 million bushels and imports by 1 million. But the larger changes occurred in usage. 2022 feed and residual usage increased by 124 million bushels, but all other usage categories were reduced. Corn usage for ethanol fell 18 million bushels, as did corn usage for sweeteners. 2022 corn exports were lowered by 4 million bushels. And while stocks were reduced, USDA lowered its 2022-23 season-average price estimate by a penny, to $6.54 per bushel. For the new (2023) crop, feed and residual usage estimates fell by 25 million bushels and exports declined by 25 million bushels. Overall corn usage is projected to be higher, but the gains continue to shrink. The 2023-24 ending stocks are now set at 2.111 billion bushels, down 110 million bushels from the September estimate, but up 749 million bushels from last year. The 2023-24 season-average price estimate stands at $4.95 per bushel.

Soybean usage adjustments were mixed. For the 2022 crop, much like with corn, production and imports were lowered slightly. Soybean crush was reduced by 8 million bushels. Seed and residual usage dropped by 23 million bushels. And exports were actually increased by 2 million bushels. Those changes boosted the 2022-23 ending stocks to 268 million bushels, so stocks rose, but the market remains tight. The 2022-23 season-average price estimate stayed at $14.20 per bushel. For the 2023 crop, the usage changes were in both directions. The domestic crush expectation increased by 10 million bushels. But exports continue to fall, with 35 million bushels removed there, based on a combination of greater global supplies and competition. Despite the export cuts, 2023-24 ending stocks are projected at 220 million bushels, down 48 million from last year. The 2023-24 season-average price estimate was set at $12.90 per bushel.

As the paragraphs above outline, crop usage is shifting just as quickly as supplies, with exports being the category with the largest shifts. For corn, USDA’s projection showed 2.025 billion bushels exiting the country from the 2023 crop. That would be 364 million bushels above last year’s total, but still well below the export totals for the 2020 and 2021 corn crops. The early export sales data is looking slightly better than last year, but still below the 5-year average pace. By the time the corn harvest reaches one-third complete, we usually have roughly 800 million bushels already sold to international markets. Over 2020 and 2021, those early sales exceeded a billion bushels. Currently, we are at 600 million bushels. It’s an improvement from last year, but still below the pace we need to hit USDA’s target.

Figure 2 shows the year-over-year gains thus far. We are seeing additional sales in many countries, but the gains are only partially filling the sizable losses from last year. Mexico is both our largest corn export market and the biggest gainer this year. Japan, Colombia, and Canada have also purchased more corn. The largest decline is with China, continuing the reduction that started with the 2021 crop. Chinese corn purchases surged under the Phase 1 trade deal for the 2020 and 2021 crops, but have fallen dramatically since the deal expired. Despite the fall in sales, China remains our 4th largest customer for corn (the countries listed in Figures 2 and 4 are the current top 6 markets for each crop, in order). And China will likely be the key to reaching USDA’s target for 2023 corn exports.

Figure 1 and 2. US corn export sales and changes

For soybeans, the general story on exports is similar, and again the early data is not encouraging. USDA’s current export projection sits at 1.755 billion bushels. That is down 70 million bushels from a couple of months ago, is down 237 million from last year, and is down 511 million from 2020. So, the soybean market is staring at a roughly 22% pullback in exports over 3 years. And given the relatively dependence of soybeans on exports, it’s a significant cut. US soybeans are facing increased competition with record global supplies and a strong US dollar.

Figures 3 and 4. US soybean export sales and changes.

Digging down into the country level data, most of the changes are relatively small, with the exception of China. Compared to this time last year, Chinese soybean purchases are down by 200 million bushels. That is two-thirds of overall drop in soybean exports.

Corn prices have been treading water since August. Meanwhile, soybean prices have mostly drifted lower. The season-average price estimates based on futures have floated in the $4.70-4.90 range for corn and the $12.40-12.80 range for soybeans during the first half of October. Traders have been watching US crop supply and usage estimates retreat at roughly the same pace. For prices to break out these ranges, we’ll need to see some positive export news.

Listen to the latest Market Outlook video for further insight on outlook for this month.


Chad E. Hart, extension economist, 515-294-9911, chart@iastate.edu


Chad E. Hart

extension economist
Iowa State University
468E Heady Hall
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