We are starting to see estimates released for next year’s U.S. acreage. The latest came from IHS Markit, which is projecting corn plantings this coming year of 91.9 million acres, up 25,000 from their previous projection and well above last year’s plantings of 88.6 million acres. Soybean acres are projected at 88.5 million, steady with the group’s previous outlook and up 1 million from last year’s plantings. Total wheat acres are being predicted at 47.18 million, down 155,000 from Markits last projection, but above the 45.7 million that were seeded last year.

The International Grains Council left the world corn crop at 1.17 billion metric tons but reduced ending stocks to 257 million metric tons (mmt), down 1 mmt from last month. The IGC revised their soybean production to 388 mmt but left ending stocks at 54 mmt. The IGC lowered its world wheat production forecast by 1 mmt and trimmed carryout by 4 mmt to a total of 282 mmt, mainly from losses in the Argentine crop. The Australian crop is likely larger than thought though which tempered concerns over the lower wheat figure.

While most of the attention on Brazilian production focuses on soybeans, more interest is falling on the country’s corn output. Brazil is currently forecast to raise a corn crop of 126 mmt this year, a 12 percent increase from a year ago. This will lead to elevated exports with predictions for a 17 percent increase in sales. Domestic corn consumption in Brazil is also expected to increase 6 percent, mainly for ethanol. This outlook indicates the competition the United States has seen in the global market will not subside, especially if the Black Sea continues to make exports.

The United States and Mexico remain at odds over Mexico’s pending ban on GMO corn imports. Mexico has stated that by 2024 it wants no imports of GMO corn. This statement has been revised by Mexico’s president in that they will still import GMO corn for feed, but not food purposes. Mexico currently imports 26-28 mmt of U.S. corn and thoughts are this change in policy will cut them to 13 or 14 mmt. The U.S. is threatening legal action if Mexico follows through on this ban as it will go against the trade policy between the U.S., Mexico, and Canada.

There remains a sizable difference between current U.S. export volumes and those that are being projected by the USDA. Corn exports at the present time are down 33 percent from last year compared to the 13 percent decline being predicted. Soybean loadings are down 10.1 percent from the previous year while a 5 percent decline is being used in balance sheets. Wheat loadings are down 4 percent on the year, which is closer to the USDA projection for a 3 percent decline. These volumes indicate the USDA will likely reduce our demand projections moving forward, especially on corn and soybeans.

Another source of pressure on the market is the difference between the domestic balance sheets and those of the global market. This is especially the case on soybeans where the U.S. stocks to use is just 5 percent, but global production is rising. This is most evident in Brazil where the crop could be more than 30 percent larger than last year. As a result, Brazilian exports could be up 16 million metric tons. Canada is also projecting a larger canola crop and exports, and Indonesia is projecting the same on their oilseed crop. As trade becomes more comfortable with this outlook it is showing less worry over domestic balance sheets.

The U.S. marketing year started out strong on beef this year but has since cooled off. Cumulative U.S. beef exports now stand at 973,800 metric tons. Last year at this time, the U.S. had 1 mmt of beef sold for export. South Korea is the primary buyer of U.S. beef with 271,000 metric tons. Pork sales currently total 1.457 mmt, compared to 1.745 mmt a year ago. This is the lowest volume sold for this time of year since 2018/19. Mexico is the largest pork buyer with 628,600 metric tons. The loss of Chinese buying has slowed demand of both meats.

China has in fact backed off on its purchases of U.S. beef and pork in recent weeks, but this expected to be short lived. China scaled back on its meat imports following recent outbreaks of COVID in the country and how restrictions limited consumer demand. We are again seeing pork demand build in China which has driven pork values up 52 percent from last year in October.

Farmers in China are also holding hogs off the market to drive up weights and receive higher values for them. The Chinese government is trying to stop this activity, but until it does, the country may need additional imports to satisfy demand. This is especially the case as China starts to prepare for its upcoming Lunar New Year holiday at the end of January.

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