What the United States will see for acreage this coming production season is becoming more of a market topic.

Last year, U.S. farmers seeded 88.6 million acres of corn as weather was a major issue for spring planting. This total is expected to be much higher this year with some analysts predicting U.S. corn plantings at 94 million acres. While possible, this seems like a stretch. To reach this level, the U.S. would need to see very little prevent plant and bring in acres from the reserve program. In the USDA baseline projections, U.S. corn acres were predicted at 92 million. This number is more realistic. The main reason some analysts are higher is because that is what they feel the U.S. will need for corn acres to satisfy demand. The uncertainty in this is how much corn demand the U.S. will lose to South America if Brazil’s crop is as large as some predict.

We are also seeing estimates for elevated soybean plantings this coming year. Last year, U.S. farmers planted 87.5 million acres of soybeans and thoughts are this will increase to between 89 and 90 million acres this year. This is a highly monitored number as the stocks to use on soybeans is a minimal 4.8 percent right now and rationing is needed in the complex. Any loss of acres or yield this year and that number will decline even further, and the need for rationing will increase.

While this is positive for the domestic market, the global outlook is much different. For one, the global soybean reserve is predicted to be at a three-year high at the end of the marketing year, given the massive crop that is coming out of Brazil. Brazilian officials are now projecting soybean exports for 2023 at 93 million metric tons (mmt), an increase of 14.1 mmt from last year. These factors will likely curtail demand for U.S. soybeans and help reserves build.

Trade is showing more interest in total U.S. wheat acres this year. U.S. farmers seeded a large 37 million acres of winter wheat this year. Spring wheat acres may also increase given recent weather pattern changes and elevated values. This has some analysts predicting 47 to 48 million total acres of wheat will be raised in the U.S. this year compared to 45.7 million last year. Given the ongoing strength in wheat and low cost of production we may see even more plantings than this estimate, which is already a seven-year high.

Not only is the United States going to see elevated export competition from Brazil on corn and soybeans this year but on products as well. The most notable of these will be ethanol. Brazilian ethanol manufacturers are expected to consumer between 5 and 5.5 million bu of corn this year as ethanol production ramps up in the country. This ethanol is currently being offered at a 10 cent per gallon discount to the U.S., which will attract import interest. Brazil will also see elevated distiller grain production this year and that will likely be exported as well.

One of the most highly debated figures in the market right now is on the size of the Argentine soybean crop. In the February WASDE report, the USDA projected the crop at 41 million metric tons (mmt). Nearly all other estimates are below this level though, and some by a considerable amount. The group Oil World projected the crop at just 34 mmt. There are several variables in these estimates including total acreage and if analysts expect current weather conditions to persist. The question is how much soybean production in Argentina can be lost without impacting total South American output. Data shows that anything over 30 mmt in Argentina will be offset by the large crop out of Brazil.

U.S. ag product sales data for 2022 has been released. For the year, the United States sold a record $200 billion of ag products. Of this, 19.2 percent was to China. Economists are predicting much less revenue in 2023, with $150.6 billion in sales being predicted. Lower commodity values and a decline in global market share are main factors for the lower return. Farmers are still optimistic on their overall financial outlook though, mainly from lower input costs.

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