Corn exports above seasonal pace

KANSAS CITY, Mo. — The trade’s focus continues to be on U.S. exports and South American weather as the market continues to wade through winter.

Arlan Suderman, StoneX chief commodities economist, highlighted details and possibilities after the U.S. Department of Agriculture’s supply and demand estimates report was released Feb. 11.

USDA made no changes in the U.S. corn and soybean balance sheets and cut 4 million bushels from the wheat ending stocks. How did the market react?

Suderman: That’s still a very high wheat ending stocks number at 794 million bushels. That 4 million bushels was from higher food use for wheat.

That is why the markets reacted negatively after the report was released. They made the adjustments on the world balance sheet, none of which made a difference on a domestic balance sheet.

No need to ration demand with higher prices when it’s not impacting U.S. balance sheets and there are still adequate supplies. The funds got frustrated and they took profits.

USDA made no change to corn ending stocks at 1.54 billion. I’m a little bit tighter at 1.475 billion.

The export number still has notable upside potential. I’m 50 million bushels above USDA.

The potential is there to go higher. I’m being conservative, just trying to see if we’re being frontloaded or not.

Exports a major piece of the balance sheet pie. Is the United States at the pace expected by USDA for this marketing year?

Suderman: Weekly corn export shipments are still well above the seasonal pace and have been above it most of the marketing year. That’s why right now marketing year-to-date corn export inspections exceed the seasonal pace needed at USDA’s target by 140 million bushels and that gap keeps growing in size.

USDA chose not to increase its corn export target for the United States in this report because it’s worried about this being frontloaded demand and to a great extent that’s possible.

I still believe that they could have raised it 25 to 50 million bushels and could have justified that pretty easily. USDA chose not to. I anticipate come next month we’ll probably see an increase in exports.

Mexico is the No. 1 corn export customer for the United States by a long distance, followed by Japan, and followed by Colombia, another country that’s been in the tariff news of late.

Soybean shipments were really running hot until the change of the calendar year and then they’ve been running cold. We built up a big surplus running market year to date of about 135 million or 140 million bushels above the seasonal export pace needed to hit USDA’s target.

Now that has shrunk to 82 million bushels above the target. I still think we end up a little bit above USDA’s target, but how much is yet to be answered.

U.S. soybean exports are largely to China with about 22.5 million, maybe 23 million metric tons expected this year marketing year. That used to be between 35 and 40 million metric tons.

Mexico is another significant importer of U.S. soybeans. Brazil clearly has a currency exchange rate advantage.

Corn for ethanol was unchanged at 5.5 billion bushels for 2024-2025, up from 5.478 billion the previous marketing year. What are you seeing in terms of corn for ethanol demand?

Suderman: Ethanol use of corn continues to be relatively solid as we’ve seen near-record production this marketing year. We’re about 26 million bushels above the seasonal pace year to date needed to hit USDA’s target.

USDA lowered global corn, soybeans and wheat ending stocks below pre-report trade expectations. What are some of the particulars?

Suderman: For world ending stocks, we saw declines in wheat, corn and soybeans and you could make an argument particularly the soybeans had a pretty significant decline from 128.7 million metric tons last month to 124.34 million this month, but it didn’t impact U.S. exports.

In fact, USDA cut a dime off their soybean marketing year average cash price while adding a dime to the corn even though they made no changes to those balance sheets.

USDA had Argentina corn production at 50 million metric tons, down 1 million from where they were last month. Argentine soybeans were down 3 million metric tons from last month at 49 million.

I’ve been a little more conservative in reducing soybeans because I think they could still benefit from late rains. Will they? I don’t know.

I just tend to be more conservative in making my adjustments because I don’t want to be going back and forth with my production estimates.

The Argentine corn is probably reasonable because they’ve had some early corn pollinating and I could see that coming in a little bit lower.

Brazil corn came down 1 million metric tons to 126 million. Our customer survey says 129.4 million.

USDA said it reduced Brazil’s corn by 1 million metric tons because the crop is getting planted late, but that’s like cutting the U.S. corn yield in the May crop report because planting is 10 days behind normal. That is premature in my opinion.

Brazil soybean production was left unchanged at 169 million metric tons.