The USDA is starting to get caught up on its data from the 2025 government shutdown. Some of the most anticipated numbers were the export sales updates.

A hindrance for the soy complex recently has been sporadic Chinese buying. Even with erratic buying, China’s purchases of U.S. soybeans since a trade war truce was called have totaled upward of 9 million metric tons, closing in on the 12 mmt target. While China buying has been hit and miss, we have seen other importers starting to extend their coverage. This is positive news as it shows the U.S. is competitive in the global market, even if China is not buying.

Despite hopes for peace, the elevated fighting in the Black Sea has been supporting the U.S. grain market. Exports of grain out of the Black Sea have been shut off from elevated fighting with Ukraine reporting port capacity utilization of just 20 percent. The greatest loss from the region has been to wheat, mainly for milling purposes. This has been a great benefit for the U.S. export market, with sales of both wheat and corn running ahead of last year.

There are some analysts who believe U.S. corn export demand is front-loaded this year, meaning importers are covering needs ahead of usual. While this is possible, the lack of available Black Sea stocks and building stress on the Argentine corn crop may keep buying interest extended. Brazil sources claim it will be July before the country has corn for export this year, extending the window of opportunity for U.S. sales.

China has also started to show more interest in grain imports despite stating the country harvested a bumper grain crop this year. China’s grain crop may have been large, but quality is reportedly an issue. This is especially true for corn where some stocks are not making feed grade.

Chinese officials have again announced plans to increase the country’s self-reliance on production agriculture. China’s government wants farmers to focus on high-producing land to boost the country’s grain crops. This will allow China to plant less crop area but produce larger crops. China is also looking at ways to diversify its food supplies. The goal of this is to make China’s farmers more profitable and at the same time decrease its need for imports.

The Brazilian analytical firm Ag Rural is reporting the very early start of the Brazil soybean harvest is taking place. While there is not enough of this taking place to get a clearer picture of the entire Brazil soybean crop, we may start to see its impact on Brazil markets, mainly cash values. As the Brazil soybean harvest advances, basis will be the first indication of not only yields, but farmer intent. Even if Brazil does harvest a large crop, lack of selling will cause the country’s values to firm.

A situation is developing in Brazil that could have significant impacts on global soybean trade. The Brazilian state of Mato Grasso has announced it will be eliminating tax incentives for entities that try to curb Amazon deforestation. This has caused some soybean trading groups to consider dropping the agreement they signed to deter deforestation. How this will be received by global soybean importers is uncertain, as many claim they want soybeans from groups who oppose deforestation practices. Last year Mato Grasso produced 51 million metric tons of soybeans, more than all of Argentina.

The U.S. quarterly hog and pig report came out with a higher-than-expected total. The United States had a hog herd of 75.5 million head on December 1st, up 1 percent from a year ago. Trade had been expecting a 1 percent decline in hog numbers. Hog inventory was split with 69.6 million market hogs and 5.95 million breeding hogs. The U.S. hog litter size was larger in the last quarter at 35 million, a top reason for the higher numbers.

China has announced it is now imposing a 55 percent import tax on beef above the country’s 2.7 mmt import quota. This will last for three years and is being enforced to support the country’s domestic livestock market. The countries that will be impacted the most from this are the U.S., Brazil, and Australia. In 2024 China imported a record 2.87 mmt of beef with 157,000 mt coming from the U.S. 

Russian authorities have set export quotas for the second half of their marketing year. From February 15th through June 30th the Russian government has set a grain export quota of 20 million metric tons. This is twice the grain exports that were allowed last year over the same period. Russia’s Ag Minister is still holding yearly grain exports between 53 mmt and 55 mmt.

U.S. biofuel manufacturing data for the month of October showed a 47 million pounds decline in soy oil consumption to 1 billion pounds. This was a six-month low for the industry. Biodiesel consumption was down 22 million pounds and renewable diesel usage was off by 26 million pounds. Use of other feedstocks was also down for the month, including used cooking oil, which was down 19 million pounds. Yearly soy oil consumption for biofuel production is still on pace to meet marketing year projections.

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