The USDA believes ag exports for the 2013 fiscal year will total $143.5 billion. This is $6.1 billion higher than the previous income record set in 2011. Not only is this from an increase in export values, but a 50 percent rise in exports since 2009.

China and Canada are tied for the primary destinations of U.S. ag products, with roughly $21 billion of purchases each.

Trade continues to debate how much of the U.S. corn crop has already been harvested. Some field scouts claim up to 1 billion bushels of new-crop corn has already entered the nation’s supply line.

This compares to the 250 million bushels of corn harvested early, a year ago. The obvious question is how this newly harvested corn will impact balance sheets, on both old and new crops.

While most attention in the United States is on harvest, in South America it is on planting. Planting will begin in South America in the next week, and rapidly progress toward the end of the month.

This will shift the focus of the weather outlooks from the United States to South America. Current conditions are favorable for South American production, but this is a factor that can change in a short amount of time.

One issue that could prevent the South American soybean crop from being planted at a rapid pace is logistics. There is roughly a two-month wait for vessel unloading in South America at this time due to labor disputes.

If these continue, they could easily prevent fertilizer from reaching interior regions in a timely manner. Not only could this slow planting, but limit the expansion to production that is expected to take place this year.

One of the main weather stories right now is the possible development of the El Nino system, and how it could impact global grain production. In South America, an El Nino tends to lead to above normal yields. Many forecasters have used these outlooks to raise their possible yield estimates for those countries. This is most critical on soybeans, as the world cannot stand another year of reduced soybean production.

New-crop soybean sales are already at 55 percent of the year’s estimates, and will likely be at 100 percent by the end of harvest. The question now is if buyers will back away from the United States as a commodity source at that time, or if exporters will cut into domestic soybean needs for coverage.

This could cause a major issue for the U.S. livestock industry, as the recent drop in ethanol manufacturing means fewer dried distillers grains will be available as well. Livestock producers may struggle to find protein-based feeds next summer.

The United States continues to lose its share of the global corn market. In August, Brazil exported a large 109.3 million-bushel of corn. This was the largest one-month volume in history for Brazil, and comes at a time when U.S. corn sales are at some of their weakest monthly levels in years.

Argentina may take additional business away from the United States, as not only is that country offering corn at a substantial discount to the U.S., but has now approved more bushels to be sold, as well.

Even though the spring planting season is months away, acreage is already becoming a market factor. There are several analysts who expect corn acres to decline this year, even though market economics heavily favor the production of that grain over soybeans. This is from the higher cost of production that corn has, as well as the potential for soybeans to rally if a shortage does in fact develop.

There is also a possibility of acres shifting to corn from other crops, mainly cotton.

Karl Setzer is a commodity trading advisor/market analyst at Maxyield Cooperative. His commentary and market analysis is available daily on radio, in newsprint and on the Internet at www.maxyieldcooperative.com

The opinions and views in this commentary are solely those of Karl Setzer. Data used for this commentary obtained from various sources believed to be accurate.

This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position.