The USDA’s Economic Research Service has updated its U.S. 2024 trade balance sheets. U.S. ag exports in 2024 are estimated at $170.5 billion, unchanged from the group’s last projection. Livestock, poultry, and dairy exports are expected to generate $38.5 billion in revenue, an increase of $800 million from the last estimate. Beef exports are forecast to rise $200 million from higher cattle prices and strong demand. U.S. ethanol exports are forecast at $4 billion, up $400 million from the previous estimate.

Grain and feed exports are forecast to total $37.6 billion, a decrease of $600 million from the February projection. Soybean and product exports were trimmed $400 million from the last projection to a current $35.8 billion as competition from South America for market share builds.

The top trade customer for 2024 is expected to be Mexico with $28.7 billion, and just behind this is Canada with $28.4 billion. These are both record high import totals. China is now the U.S.’s third largest export destination with $27.7 billion in purchases forecast, a $1 billion reduction from the last estimate.

While this data is positive, trade is showing more concern over the slow start to the new crop marketing year’s export sales. So far, the United States has sold just 962,000 metric tons of new crop soybeans for export, the slowest start to a marketing year in 19 years. A year ago, we had forward sales of nearly 3 million mt by this time. The greatest concern is that we have no soybean sales listed to China for 2024/25 delivery. If we do not see new crop demand start to build soon, the USDA will start walking back its yearly export forecast of 51 mmt.

Trade is also showing more concern on new crop corn demand where forward sales are at a five-year low. A lack of Chinese business is also to blame for the slow start on corn bookings.

We have been seeing more interest in the outside markets recently following the consumer confidence index data that showed a surprisingly better than expected reading. This shows us that consumers are not as concerned with inflation and high prices as analysts had thought. While this is positive news for commodity demand, it further removes the probability of an interest rate cut in the near future. This has also generated more talk of potential rate hikes.

Trade is also focusing on the 5 percent growth rate that is being seen in China’s economy. This is better than the 4.6 percent growth rate that the International Monetary Fund had previously forecast and shows China’s economy is improving. Economists feel this may be a temporary improvement though as China’s declining population will slow both growth and demand in the future.

China has recently opened its door for Argentine corn imports by approving two varieties for purchase. This will undoubtedly impact U.S. corn demand, and likely alter global trade patterns. Brazil has started to provide China with more corn for import in recent years, which has cut demand for U.S. offers. Now that Argentina can ship corn to China it will reduce demand for corn from all other sources, including the U.S., Brazil, and Ukraine. China has also lowered its total corn import forecast from all sources as feed consumption will decline from consolidation in the country’s hog industry.

The question now is whether we will see other importers step up to fill this void in U.S. sales. Mexico has been a primary corn buyer in recent months, but this is captive demand and already factored into price forecasts. Analysts feel Black Sea corn production will be down this year, and this may bring the U.S. additional corn demand, especially into the Asian market.

The U.S. acreage debate is again heating up, mainly on corn. U.S. corn acres were projected at 90 million in the March intentions report and that is what is being used in the current 2024/25 balance sheet outlooks. Many analysts felt this was too low and actual plantings would be closer to 92 or 93 million acres. The uncertainty in the market now is if prevent plant corn acres will reduce the March intentions number or simply make it more accurate. More importantly, trade is questioning the 82.1 million harvested acres being used in balance sheets, as these are what determine production.

Now is a time when trade starts to pay a little more attention to cash grain movement across the domestic market. When commodity values rallied earlier this month, we saw an increase in country selling of stored inventory. After this initial bump in movement, selling again slowed. We are now starting to again see movement pick up, mainly in regions of the Corn Belt where developing crops have seen little stress. Trade takes this as a sign of farmers being comfortable enough with their production potential to liquidate remaining old crop inventory.

RISK DISCLAIMER: The risk of loss in trading commodity futures and options is substantial. Before trading, you should carefully consider your financial position to determine if futures trading is appropriate. When trading futures and/or options, it is possible to lose more than the full value of your account. All funds committed should be risk capital. Past performance is not necessarily indicative of future results. The information contained in this report is collected from a variety of sources and is believed to be reliable but is not guaranteed to be accurate. This report is provided for informational purposes only and is not furnished for the purpose of, nor is it intended to be relied upon for specific trading in commodities herein named.