February 2024

Mixed messages on exports

With many of the agricultural production storylines being continuations from the last couple of years, drought challenges in North and South America and the war in the Black Sea region, global crop production remains incredibly resilient. Global corn production surged higher and soybean production set another record. The competition for international sales has been fierce. And for most of 2022 and 2023, the US was losing market share, as our prices held above our competitors’ and those ample global supplies provided plenty of lower cost alternatives, especially from Brazil.

Currently, the market is focused on the weather conditions in South America and their impact on South American production. For the 2022 growing season, the South American drought had larger impacts in Argentina. For 2023, the drought shifted into Brazil. Tables 1 and 2 show the latest global estimates from USDA and the major adjustments were in South American crops. For corn, the general picture is for much larger global production, with drought recovery in Argentina sharply increasing corn production, making up for a decline in Brazilian production. The latest update shaved 118 million bushels off of Brazil’s corn supply. However, increased corn production in Argentina is strong enough to lead to higher South American corn production despite the cut in Brazilian supplies. Combined, Argentina and Brazil are forecast to produce just over 7 billion bushels of corn this year, 276 million more than last year.

Table 1_2. World corn production.

The global soybean situation is similar. Global production is higher, despite the fall in US production. The weather issues in Brazil forced USDA to downgrade soybean production potential by 37 million bushels. But as with corn, the Brazilian decline is more than made up for by the increase from Argentina (a reversal from last year). In fact, the growth from Argentina is enough to cover both the Brazilian and US declines. Combined production across Argentina, Brazil, and Paraguay is 7.95 billion bushels, up 705 million bushels from 2022-23.

The export markets have been the defining demand segment for both the corn and soybean markets over the past few years. Strong export demand led record shipments from the 2020 crops and record export values for the 2021 crops. However, drops in export demand over the past 18 months have led to falling prices for both commodities. Figures 1 and 2 show the export sales pace currently and compare it across the past few years. In both graphs, the blue line (square markers) shows the sales pattern for the 2021 crop, when both corn and soybeans set records for export value. The green line (triangle markers) shows the pattern for the 2022 crop, when the export losses built up. The red line (diamond markers) shows the sales for the 2023 crop thus far and the black line displays the five-year average pattern for export sales.

For soybeans, the weakness in export sales appeared roughly a year ago. Within roughly six weeks, our export pace fell from being on par with the previous year to being 300 million bushels behind. Sales fell in China, Mexico, Japan, Taiwan, and Egypt, among our major customers. That drop in sales has continued for the 2023 crop, pulling our soybean export sales pace below average. USDA’s current outlook shows soybean exports remaining below average, not only for the 2023 crop, but also 2024. While we have seen some additional sales into the European Union and Indonesia, the driving factor is the lack of sales to China. Currently, US soybean sales into China are down 300 million bushels from last year. Without a change there, soybean exports will remain below average for some time.

For corn, export sales fell off at the start of the 2022 marketing year and didn’t recover. The drop in sales during 2022 put us well below the 5-year average. However, corn exports started to rebound with the beginning of the 2023 marketing year. That rebound has brought corn export quantities back up to roughly the five-year average. Compared to last year, corn export sales are up nearly 350 million bushels. Mexico has increased purchases by 150 million bushels. Japan is up by over 100 million. Colombia, South Korea, and Canada are also up substantially. But China is the trailing market here as well. Corn sales into China are down 100 million bushels currently. USDA’s current projection has 2023 exports keeping pace with the five-year average at 2.1 billion bushels and 2024 exports slightly higher at 2.15 billion.

Figures 1_2. Soybean and corn export sales.

For 2023-24 season-average prices, USDA held firm with corn at $4.80 per bushel, but lowered soybeans to $12.65 per bushel, a 10-cent decline. The pullback in exports throughout the 2022 marketing year set the stage for lower prices for the 2023 crops. USDA’s early outlook for the 2024 crops shows production being larger than usage, translating to building ending stocks and lower prices. For the 2024-25 season-average prices, the estimates are $4.40 per bushel for corn and $11.30 per bushel for soybeans. Currently, futures point to the 2024-25 season-average prices being in the $4.50 range for corn and the $11.20 range for soybeans. So, the markets are generally in line with USDA, but are slightly more optimistic for corn and slightly more pessimistic for soybeans. Those slight differences are likely based on the export trajectories of the two crops. Any additional boosts in export potential will support prices. Many things can change over the next 18 months (to the end of the 2024-25 marketing year). The droughts in both North and South America continue. La Niña is forecast to replace El Niño. Biofuel development presses forward, especially for renewable diesel and sustainable aviation fuel. But given the current outlook, both crops are looking at a breakeven year at best.

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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