Harvest pressure is starting to build in the United States. This is not uncommon, but the real question is how long values may be pressured, especially basis. Buyers across the country still need higher quality inventory for blending purposes and this is avoiding much of the seasonal basis pressure we see. A wide range in yields is also supporting basis as buyers want to secure as much fall inventory as possible as farmer selling is expected to be limited once harvest is complete. We have not seen the export demand we hoped for though, and this is keeping a cap on basis for now.

While all attention in the United States is on harvest, in South America it is all on plantings. Total South American soybean production for the 2022/23 year is forecast at 211 million metric tons, an increase of 21.3 percent from last year. South America’s corn crop is estimated at 187.5 million metric tons, up 6.5 percent from a year ago. The main reason for these increases is hopes for more normal growing season weather conditions, although the La Nina is still causing concern in Argentina. Expansion is also behind the larger crop sizes, especially in Brazil, where total acreage this year may be up 6 percent from last year.

Trade is also monitoring the planting of the winter crops in Ukraine. It is thought winter crop plantings in Ukraine will be down 30 percent from last year, with the greatest reduction to winter wheat. Not only is the movement of needed inputs an issue in Ukraine, but the simple ability to get into war-torn fields is a hindrance. While this is an issue, larger crops in other countries are negating much of the worry over lost production.

Corn futures have been choppy recently as the supply/demand debate intensifies. U.S. corn yields are down and production this year will be the lowest in recent history. That said, the United States is not seeing demand that was expected and a smaller crop is starting to be offset with lower usage. Corn demand is heavily focused on exports though, and domestic demand may be underestimated, especially on feed. It is thought the drought in the U.S. Plains and Southwest has trimmed total grain production by 830 million bu (mbu). There is little doubt this region will need to import feed grains to compensate for these losses.

The cumulative U.S. export pace on grains and soybeans to start the marketing year is mixed. Through Sept. 15, the United States had exported 45.1 mbu of corn, an increase of 84.4 percent on the year. Soybean exports totaled 33.54 mbu, 81.2 percent more than the start of the last marketing year. Wheat inspections have struggled the start the year though and only totaled 265 mbu by the middle of the month. This is a decline of 7 percent on the year.

Demand for U.S. beef in the global market remains record high, with the most trade being done with China. Chinese imports are up 133 percent on the calendar year at 92 million pounds. Total U.S. beef imports from last year have risen by 133 million pounds. This has pushed yearly exports to 2.09 billion pounds for the marketing year. This export volume is a record and accounts for 13 percent of U.S. production. We have started to see more competition from Brazil in the global market though, and this may slow U.S. exports as the year progresses.

While demand for U.S. beef remains high, interest in U.S. pork has faltered. The main reason for slow pork demand is the lack of China buying as trade between the two countries is down 66 percent from a year ago. This loss of business has been partially offset with elevated demand from Mexico, which has purchased 1.32 billion pounds of pork from the United States. While this is up 25 percent from last year’s sales to Mexico, it only covers about half of the lost trade with China. Cumulative U.S. pork exports are down 16 percent from last year and a three-year low, although still above long-term averages.

The Aug. 31 cold storage report showed the trend of higher products than a year ago continued. At the end of August, the United States had 515.68 million pounds of beef in storage, 4 million more than the end of July and 100 million more than the end of August 2021. Pork in cold storage totaled 532 million pounds, 5 ½ million more than in July and 78 million more than in 2021. Pork belly inventory declined 10 million pounds on the month to total 32.5 million pounds, but this was still 15 million pounds more than a year ago. Total U.S. red meat inventory was up 20 percent on the year.

As of Sept. 1, the United States had 11.22 million head of cattle on feed, 101 percent of a year ago. This is the second highest volume of cattle on feed since record keeping began in 1996. Placements during the month were 100 percent of last year at 2.21 million head. Marketings were heavier at 106 percent of last year with 2 million head. These numbers indicate animals are moving into lots earlier due to poor pastures, but also being heavily marketed.

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