The analytical firm Informa has released their updated acreage estimates for the 2023 planting season. Informa is predicting U.S. corn plantings of 91.9 million acres this coming year, up 445,000 from their previous estimate and 3.3 million more than what was seeded in 2022. Soybean plantings are forecast to total 88.5 million acres, down 400,000 from last month but up 1.1 million from last year. Informa is projecting U.S. all wheat acres at 47.3 million, down 560,000 on the month but up 1.6 million from 2022. There are obviously several factors that will impact these numbers moving forward with cost of production and weather being the two primary ones.

Brazilian officials have released data for the number of acres they could potentially bring into production if needed. At the present time Brazil has 400 million acres of pastureland that could easily be converted to crop land if needed. Of this, nearly half is considered low-grade pasture and would be the first to be converted. Last year Brazilian farmers planted a total of 189.2 million acres compared to the 221.8 million in the United States for the three main crops. Even if Brazil’s yields do not increase, which they have been, this expansion would make them the leader in global commodity production and trade. Brazil already leads the U.S. in soybean production.

Demand has been one of the greatest unknows in the market recently with several indications this is overstated on both corn and soybeans. This is mostly from exports which have not been up to expectations, especially on corn. Trade has been less concerned on soybean demand but believes exports will fade there as well.

We are now hearing concerns over the crush pace on soybeans as the September National Oilseed Processor Association usage total came in below trade expectations. Given the current USDA yearly crush projection, we need record usage every month. We are already short of this which means the rest of the year will need to be even higher to reach projected totals.

When it comes to demand, the United States continues to see heavy pressure in the global market from Brazilian corn exports. Brazil exported 7.2 million metric tons (mmt) of corn in October, which is a record for the month. In October 2021, Brazil only exported 1.9 mmt of corn as drought impacted crop size a year ago. Year to date corn exports from Brazil are reported at 32.8 mmt, well above the 12.7 mmt that was exported a year ago at this time.

Brazil’s October soybean exports are pegged at 3.8 mmt compared to 3 mmt in 2021. Brazil’s January to October soybean shipments total 70.9 mmt, down from the 79 mmt that were shipped a year ago.

We are starting to see more comparisons between our current sales pace on corn and soybeans versus loadings. Of the U.S. corn sales for the marketing year, 24.8 percent has been shipped, a 10 percent increase on the year. While this seems positive, our current corn sales are only 50 percent of last year at this time. Soybean sales are slightly higher on the year, but shipments are down 5 percent from last year at just 10.6 percent of commitments. The primary reason for the slower soybean loadings is the logistic issues at the Gulf. Shipments out of the Pacific Northwest are picking up though which will favor overall loadings.

Even with the war taking place and transit issues, Ukraine corn exports are considerably larger this year than last. Through mid-October, Ukraine had exported 5.6 mmt of corn, nearly two and a half times last year’s corn shipments at this time. Ukraine has pushed out as much corn as possible in recent weeks as concerns the temporary corridor that has been established will again close. Wheat exports have suffered though, with yearly shipments down 63 percent on the year at 3.7 mmt. Total grain exports out of Ukraine are down 36 percent from a year ago.

The USDA has released a statement that they have greatly over-estimated the size of Brazil’s cattle herd. The USDA has been stating they believe Brazil has close to 275 million head of cattle in inventory, but now feels the total is closer to 194 million head. The USDA claims the methods used to collect and compile cattle data from Brazil was inaccurate and the primary cause of the discrepancy. The Brazilian firm Safras claims the country’s cattle herd is closer to 196.5 million head though, and that slaughter will total 32 million head this year. This is a 9.1 percent increase from 2021.

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