The planting pace of this year’s crops has been slowed by continual rainfall, especially in the Eastern Corn Belt. This is more of a case for corn as there is a much wider window to plant soybeans. Even with delays, the U.S. corn crop is getting seeded, albeit just at a slower pace than we have seen in recent years. We are already seeing analysts trim U.S. production as a result of later corn plantings than normal. While possible, there are several other factors that will impact total production, and trade has been slow to react. The fact that a reduction in corn production just makes the corn complex less bearish is limiting market response as well.

Asian grain traders have released a statement that the U.S. share of China’s soybean trade is likely going to keep declining. In 2009, the United States supplied China with 51 percent of its soybean needs. By 2023, this share had dropped below 25 percent. The growth we have seen in South American soybean production and improved infrastructure have made those countries China’s primary source for coverage.

The lingering effects of the U.S./China trade war and building geopolitical differences have also caused China to shift its demand away from the U.S. A decrease in feed demand in China has combined with more efficient feeding practices to trim China’s overall soybean usage. 

A change is taking place in the U.S. export market that is being reflected in weekly sales. We are starting to see a shift in importer buying habits with many taking smaller volumes on each purchase but making more purchases on a whole. Volatility in the market is one reason for this, but so is the fact some importers are facing tighter lines of credit. Higher interest rates are also slowing global commodity trade, especially in developing countries. The rising world commodity supply is tempering large purchases as well. What may be the greatest factor in smaller bookings is that importers want to spread their risk between more suppliers.

This is not the only change taking place in the market. Less demand is now being placed on the old crop and more on how much we are seeing for new crop. Unfortunately, U.S. export sales of both corn and soybeans are behind normal by a large amount. The greatest concern is in the low soybean bookings, with sales currently less than half of last year. This is mainly from a loss of Chinese business. For the first time in 17 years, the United States currently has no confirmed new crop soybean sales to China. We do have some sales to unknown buyers, and trade believes some of this is China, however.

The United States has also seen a decline in new crop corn demand from China, but other buyers have elevated their purchases. One of these is Mexico with purchases up nearly 6 million metric tons from last year. 

Chinese officials have long stated they wish to trim their reliance on imported commodities, especially corn and soybeans. Given the acceptance of GMO production and improved farming practices on a whole, Chinese officials believe their imports will start to decrease. China is set to import 23 million metric tons of corn in the 2023/24 marketing year, according to the firm Sitonia Consulting. This is an increase of 413 percent over the past five years, and a 602 percent increase in the last 10 years. Through improved production methods, China believes it will be able to trim corn imports to 7 mmt by the year 2033.

On soybeans, Sitonia has this year’s Chinese imports at 105 mmt. This is up 27 percent over the past five years and an increase of 49 percent over the last decade. Chinese officials believe that by 2033, they will cut soybean imports to 79 mmt. Total Chinese imports have grown by 59 percent in the last five years and by 69 percent in the past 10 years. If China is successful in cutting import demand by targeted volumes, to say it will impact global commodity values is an understatement.

The USDA’s Economic Research Service (ERS) has issued its livestock outlook for 2025 with numbers similar to the USDA’s monthly balance sheet data. Cattle supplies are forecast to remain tight in 2025, and in turn cut into the U.S.’s beef supply. The ERS is forecasting U.S. beef production of 25.12 billion pounds in 2025, a 6 percent decline from 2024. Beef consumption is forecast to decline 5 percent on the year as high costs and limited supplies impact demand. Per capita beef consumption in 2025 is expected to be the lowest since 2015 at 55.6 pounds. Low beef supply is also expected to trim U.S. exports by 11 percent from 2024, while beef imports reach record high levels. Cattle futures are expected to remain at record levels for 2025, and average 2.4 percent more than 2024.

Pork production is much less of a concern for the livestock market. The ERS also issued its pork market outlook. Commercial pork production in 2025 is expected to increase 1.2 percent from 2024 at 28.4 billion pounds. Pork exports are forecast to increase 5 percent from 2024 to a total of 7.6 billion pounds. This data indicates that 27 percent of U.S. pork production will be exported in 2025. Hog values in 2025 are expected to decline 4 percent from 2024 given the abundant pork supply.

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