The tour projected Iowa’s corn yield at 192.79 bushels per acre (bpa), well above the 2023 tour average of 182.80 bpa for the largest U.S. corn state and above the tour’s three-year average of 185.79 bpa.

But in Minnesota, the fourth-largest corn producer, the tour projected yield at 164.90 bpa, far below last year’s estimate of 181.34 bpa and the three-year average of 183.06.

The four-day tour, which began on Monday, projected above-average corn yields for six of the seven Corn Belt states surveyed.

The outlook for bumper harvests comes as grain and oilseed futures prices have slipped to nearly four-year lows amid ample global supplies.

In Iowa and much of the Midwest, crops benefited from near-ideal weather.

“Generally we’ve seen good growing conditions, and it shows,” said Brian Grete, Pro Farmer editor and leader of the tour’s eastern leg. “An early frost would be the one thing that could derail it.”

Minnesota was an exception. “The corn crop is going to struggle to make the finish line. They have seen too much excess rainfall this season, which has washed away the fertilizer,” said Scott German, a North Dakota farmer who was on the tour.

Yet Minnesota’s soybeans fared better.

The tour, which does not project soybean yields, estimated the number of soybean pods in a 3-ft by 3-ft (91-cm by 91-cm) square in Minnesota at an average of 1,036.59 pods, above last year’s average of 985.00 pods and close to the three-year average of 1,037.70 pods.

For Iowa, the No. 2 soy producer after Illinois, the tour estimated the average number of soybean pods in a 3-ft by 3-ft (91-cm by 91-cm) square at 1,312.31, above last year’s tour average of 1,190.41 pods and the three-year average of 1,194.21 pods.

This month, the U.S. Department of Agriculture forecast a record U.S. soybean crop and the third largest corn crop.

In addition to Iowa and Minnesota, the four-day tour this week scouted fields in South Dakota, Nebraska, Illinois, Indiana and Ohio.

The editors of Pro Farmer, a newsletter, will release their own estimate of U.S. corn and soybean production on Friday.

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Though scouts on the four-day crop tour said there was solid soybean crop potential in the two states, some questioned whether corn yields in South Dakota would hit the hefty levels the government has predicted – and whether there could be more grain in Ohio than expected.

The U.S. Department of Agriculture this month forecast a record U.S. soybean crop and the third-largest corn crop – a bounty that comes as grain and oilseed prices have slumped to nearly four-year lows amid robust global supplies and growing concerns about demand from top soybean buyer China.

South Dakota’s average corn yields were projected at 156.51 bushels per acre (bpa), the Pro Farmer Midwest Crop Tour said, below the 2023 crop tour average of 157.42 bpa but higher than the three-year crop tour average of 142.44 bpa.

Some scouts found persistent rains at the beginning of the growing season had limited the number of ears on the plants, pressuring yields in some fields.

“It was disappointing,” crop scout Sherman Newlin said.

In Ohio, the tour’s state average corn yield was projected at 183.29 bpa, just below the 2023 crop tour average of 183.94 bpa and above the prior three-year average of 181.06 bpa.

The USDA has projected a seven per cent increase in South Dakota’s corn yield this year and a five per cent drop in Ohio’s, compared to 2023.

The four-day crop tour, which does not project soybean yields, estimated the amount of soybean pods in a 3-by-3-foot square in South Dakota at an average of 1,025.89 pods, up from last year’s average of 1,013.00 pods and above the three-year average of 960.42 pods.

It estimated the amount of soybean pods per 3-by-3-foot square in Ohio at an average of 1,229.93 pods, down from last year’s average of 1,252.93 pods but above the three-year average of 1,193.31 pods.

The tour will release forecasts for Indiana and Nebraska on Tuesday.

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Some of that can be explained by increased trade volumes of certain items, particularly beef, but much of the boost can also be attributed to significantly higher prices this year versus last.

Data published by the U.S. Census Bureau Thursday showed U.S. agricultural and related product exports to China reached $17.5 billion between January and June (H1), up 15 percent from last year’s record for the period.

That surpasses the full-year totals from both 2018 and 2019, when China was largely shunning U.S. goods and prices were low. Soybeans accounted for 29 percent of this year’s H1 value of exports to China, corn 18 percent, cotton 11 percent and sorghum 9 percent.

Prices were already high in 2021, but 2022 started off at even steeper rates. The exported cost of U.S. corn to China in H1 2022 was 21 percent higher than in H1 last year, soybeans 23 percent higher and cotton 34 percent higher.

The 9.7 million tonnes of U.S. corn shipped to China in H1 2022 is down 24 percent from last year, though it would have been by far a full-year record in any other year. H1 soy exports at 8.8 million tonnes were up 15 percent on the year and cotton shipments of 800,000 tonnes were up a whopping 71 percent.

But that follows much weaker exports to China in late 2021, likely due to a combination of high prices, easing demand from the feed sector and slowing economic activity. U.S. corn, soybean and cotton exports to China in the current marketing year are below the prior year’s levels.

Through June, corn and soybean shipments to China in the 2021-22 marketing year that began Sept. 1 were down 33 percent and 20 percent, respectively. Cotton shipments were down 10 percent between August 2021 and June 2022.

China has been relatively quiet in recent weeks when it comes to buying U.S. corn, soybeans and cotton for 2022-23, though there were unconfirmed rumors floating around on Thursday of more bean purchases. China normally ramps up new-crop soy bookings each August.

China is the world’s largest consumer and producer of pork, though it had to turn to U.S. supplies when severe disease spread through its hog herd four years ago. However, that trade flow peaked in 2020, and U.S. pork shipments to China in H1 2022 plunged 53 percent on the year to 460,300 tonnes.

China’s increasing taste for U.S. beef has replaced some of the pork losses, as H1 2022 exports by volume surged 49 percent from H1 2021. U.S. beef and beef product exports to China in H1 of 120,500 tonnes amassed over $1 billion in value, the fifth largest item of the year behind soybeans, corn, cotton and sorghum.

That makes China the third largest destination for U.S. beef so far in 2022 behind Japan and South Korea.

– Karen Braun is a market analyst for Reuters. Views expressed above are her own.

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Disappointing export inspections last week – a marketing year low – might be an indication that the U.S. Department of Agriculture should reduce its forecast on Thursday.

Analysts see old-crop U.S. corn ending stocks up 1 percent from last month and new-crop stocks down 9 percent, the latter on an expected reduction to the harvest. But it is not clear what export adjustments they might have assumed, if any.

USDA’s latest U.S. corn export estimate for the 2020-21 year ended this month is 72.4 million tonnes (2.85 billion bushels), but only about 66 million have shipped through July. That would require August exports to top 6 million tonnes and reach a new record.

But as of July 29, corn export sales were still about 2.7 million tonnes short of USDA’s full-year target, and 2020-21 commitments have been below average for the time of year since at least April.

It should be noted that data from the U.S. Census Bureau, which was updated on Friday and is the official record of export data, shows that September-June corn shipments were at least 4 percent heavier than suggested by inspections or weekly export sales. This factor could cause analysts to underestimate total corn shipments.

To ship all current sales by Aug. 31, weekly shipments need to exceed 800,000 tonnes, above the implied 667,220 in the latest week. Weekly sales data through July 29 would suggest that number closer to 1.5 million tonnes per week.

Unshipped bookings that stand out are those to China, whose sudden appetite for imported corn boosted U.S. exports to new highs. China has not bought a significant amount of 2020-21 U.S. corn since March, and it has net canceled old-crop orders in the latest six weeks. There have been no new-crop sales to China since May.

The needed reduction to 2020-21 U.S. corn exports might be only 100 million to 150 million bushels for now based on the recent export and sales pace, though that by itself could lift old-crop stocks by well over 10 percent.

Brazil loss, U.S. gain?

In addition to China’s buying, USDA’s lofty U.S. export target for 2020-21 is also influenced by harvest losses in Brazil. When Brazil’s crop falters, more business usually reroutes to the United States, though that has not exactly played out.

High U.S. prices and soaring freight costs are likely factors in the slow U.S. business, but market participants have also wondered if global demand for corn is perhaps weaker than expected.

However, analysts expect USDA to cut Brazil’s 2020-21 harvest to 88.7 million tonnes from 93 million previously. If that is realized, it will be interesting to see what USDA does with U.S. corn exports given presumably lower shipments out of Brazil.

Brazilian grain exporter group Anec last week projected Brazil’s exports this season will be half of last year’s volume, reaching 17 million tonnes. Brazil is typically the No. 2 corn exporter and July-November is the main shipping season, though the harvest is behind schedule.

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The United States exported 3.89 million tonnes of soybeans in September, according to data published Tuesday by the U.S. Census Bureau. That is 17 percent more than in the previous year and the second-largest ever for the month, behind 4.5 million tonnes in 2017.

This follows a string of monthly soybean export records set in June, July, and August, and that was mostly due to heavier activity for China than is typical for the time of year.

Some 966,626 tonnes of soybeans were shipped to top buyer China, making up 25 percent of the monthly exports, and that was both the lowest monthly volume and share of total since April.

According to weekly export inspection data from the U.S. Department of Agriculture, October soybean shipments likely came in just over 5.8 million tonnes, some 7 percent more than a year earlier and potentially the largest monthly total since December 2017.

About 1.6 million tonnes of the October exports went to China, with the bulk of the activity occurring in the final two weeks of the month. This implies that shipments to all other destinations likely surpassed 4 million tonnes for only the fourth month in history.

But the forward book remains thin compared with previous years. As of Oct. 24, total U.S. soybean sales for the 2019-20 marketing year stood at 19.27 million tonnes, the lowest for the date since 2011. The marketing year began Sept. 1.

Sales to China are up more than five times versus the year-ago volume, but all other purchases are down sharply from last year’s record, when the trade war with China put U.S. soybeans on sale to the rest of the world.

Non-China sales, including unknown buyers, were at 13.1 million tonnes as of Oct. 24, down 36 percent on the year and the lowest for the date since 2015. Mexico is the largest buyer in that group with 2.5 million tonnes booked as of Oct. 24.

The Oct. 24 export sales report also suggested that 11.3 million tonnes of soybeans purchased for 2019-20 had yet to be shipped, down from around 14 million a year ago. However, the previous four-year average is 21.5 million tonnes.

Corn troubles

U.S. corn exports totaled 2.03 million tonnes in September, the smallest volume for the month since 1975 and the smallest quantity for any month since November 2015.

Export inspections data implies that October corn shipments may have been slightly better than in September, but not by much. The October projection would put shipments for the first two months of the 2019-20 marketing year slightly ahead of those for the 2012-13 year, which was the lightest start since 1974-75.

U.S. corn merchants had sold 11.41 million tonnes of corn as of Oct. 24 for delivery in 2019-20, just 5 percent above the same point in 2012, which featured one of the worst U.S. crops in history. Other than that, 2019 sales are the smallest since at least 1999, as far back as records extend.

U.S. corn business has been hammered in recent months by abundant and cheaper-priced supplies in competitor countries. A record-large crop in Brazil has led to unprecedented corn exports in recent months.

From July through October, Brazil shipped 26.6 million tonnes of the yellow grain, some 44 percent more than the previous high for the period set two years earlier, after what was also a record harvest. Exports out of Argentina and Ukraine have also set records this year.

USDA’s latest target for 2019-20 U.S. corn exports is 1.9 billion bushels (48.3 million tonnes), equivalent to the volume from 2015-16, but down nearly 16 percent from the latest three-year average. USDA has also reduced its outlook by 16 percent for the current year since its initial forecast in May, but some analysts question whether more cuts are needed.

USDA’s 2019-20 soybean export outlook is 1.775 billion bushels (48.3 million tonnes), up about 2 percent from last year but down 15 percent from the previous three-year average. The agency has reduced its estimate by 9 percent since May.

Market participants may have a weaker bias on soybean exports than those for corn because of the uncertainty around future trade with China. USDA will have an opportunity on Friday to adjust all forecasts further if needed.

Other September notables

The United States exported 2.29 million tonnes of wheat in September, bringing total shipments to 8.96 million tonnes for the 2019-20 marketing year that began June 1. That volume is in line with the recent five-year average.

USDA has 2019-20 wheat exports up 5 percent over the recent five-year average, and the first four months accounted for 35 percent of the annual target. Export sales as of Oct. 24 had reached 14.6 million tonnes, a shade above the recent five-year average for the date.

U.S. pork shipments have been elevated in recent months due to the meat shortage in China caused by African swine fever. Through September, total exports for the year had hit a record 1.9 million tonnes for the period. Some 28 percent of that has gone to Mexico and another 18 percent was sent to China.

However, when removing China’s exports, pork shipments to all other destinations through September were down 4 percent on the year. Export data from the weekly export sales corroborates this notion, and although export sales do not include the full gamut of pork products as does the Census data, they imply that some 84 percent more pork is still left to be shipped this year versus last year as of Oct. 24.

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Four of the 16 Crop Watch fields remain: the corn in Nebraska, Minnesota and North Dakota, and the soybeans in North Dakota. The Minnesota and Nebraska fields should be harvested in the next 10 days. North Dakota is still waiting for the ground to either dry out or freeze before harvest activity can ramp up.

Crop Watch 2019 follows one corn and one soybean field in eight major U.S. Corn Belt states, reporting on weekly progress as of Sunday. The fields belong to the same eight growers from last year’s Crop Watch.

The producers have been evaluating yield potential weekly on a scale from 1 to 5 since June. The lowest score is well below farm average, 3 is near farm average, and 5 is well above. A score of 4, for example, would be above the recent field average by about 5 percent to 10 percent. For simplicity, the eight-state averages are not weighted in any way.

The eight-field yield averages for corn and soybeans both remain unchanged this week at 3.28. For comparison, the unweighted 2018 final Crop Watch yield scores were 3.94 for corn and 4.06 for soybeans.

Analysts predict data from the U.S. Department of Agriculture on Monday afternoon will show the U.S. corn harvest at 43 percent complete and soybeans at 62 percent. That would be up from 30 percent and 46 percent, respectively, in the previous week.

East Central North Dakota

Yield expectations for the corn and soybean fields remain at 2 and 1.5, respectively, and the harvest date is still unknown. Last year’s corn field was completed Dec. 12 with a final yield score of 4.5, and the soybeans were cut Oct. 25, scoring a 4. Fields in the immediate area are still far too wet to attempt harvest, but some producers are doing so anyway, and a lot of equipment is getting stuck. Producers that are cutting soybeans are having to run them through a grain dryer as they are coming off with moisture levels between 17 percent and 21 percent.

The producer estimates that at most 20 percent of summer crops have been harvested in the area, and local growers are getting very anxious about the financial situation and next year’s prospects. Loans for next year will be difficult to secure without the capital from this year’s harvest, and this is just one of the factors tempting producers to push the boundaries on harvest.

Southern Minnesota

Expected corn yield is unchanged at 3.5, but the producer suspects possible downside based on results from some nearby fields. The corn should be harvested this week. The soybean field was cut on Oct. 18 with a yield score of 3.25. Last year’s fields both scored 3, so the 2019 fields may be slightly better, though potential was reduced by overly cool and wet weather. The grower estimates that up to 90 percent of beans and 20 percent of corn have been harvested in the area.

Northeast Nebraska

Expected corn yield remains at 4.25, but the harvest may still be up to 10 days away. The soybeans were cut Oct. 17 with a final yield of 3.5. Last year’s fields both scored a 4. The producer estimates about 85 percent off beans and 15 percent of corn has been harvested in the area, and excessively wet conditions are not as much a problem now as when harvest began. Yield results in the area are mixed, but the producer says fewer people are disappointed with yield than are satisfied with it.

Central Kansas

The soybeans were cut Oct. 18 with a final yield of 3.5, and the corn was finished Sept. 26, scoring a 3. Last year’s corn scored a 1 and the soybeans 2.5. Corn is about 95 percent complete in the area and soybeans about 75 percent, and that is up about 10 and 15 points on the week, respectively. Winter wheat planting is about 95 percent complete. The producer notes that soybeans turned out relatively better in the area than corn, and that sorghum performed exceptionally well. The sorghum harvest is about 60 percent complete.

East Central Iowa

The corn was harvested Oct. 19 with a final score of 3.75, and the beans were cut Oct. 9, also finishing at 3.75. Last year’s fields both scored a 5. The producer estimates the area is about 30 percent done with corn and 60 percent done with soybeans as of Sunday, and the moisture levels remain high in both crops. Yields in the area are coming out slightly better than expected so far.

Southeast Illinois

The corn field was completed Oct. 18 with a final yield of 1.75, and the soybeans finished on Oct. 1 at 2.5. Both scores were below expectations. Last year’s corn field ended at 4 and the soybeans 4.5. The producer estimates that about 80 percent of beans and 50 percent of corn have been harvested in the area, up about 5 and 20 points on the week, respectively. Yields are coming in below expectations across the board. Heavy rains over the weekend will prevent field work from rapidly progressing this week.

Central Indiana

The soybeans were harvested on Oct. 13 with a score of 3.25, and the corn was completed Oct. 2 with a final yield of 3. That compares with scores of 5 last year. Soybeans are up to 80 percent completed in the area, a jump of nearly 40 points on the week. Rain slowed down field work over the weekend, but the producer hopes to get restarted on Monday.

Central Ohio

The corn was harvested on Oct. 17 and the beans on Oct. 3, and both fields scored a surprising 5. Last year’s corn field scored a 5 and the beans 4.5. The bean harvest is nearly complete in the area and the corn is about 75 percent done, both a rise of about 30 points on the week. The producer notes that the yield results are mixed, but the fields getting better results are overwhelmingly those that drain moisture efficiently. He estimates about half of the fields in the area have a good drainage system.

Field photos and more information on Crop Watch 2019 can be found on Twitter using the hashtag #CropWatch19 or by following the handle @kannbwx.

The following are the states and counties of the Crop Watch corn and soybean fields: Griggs, North Dakota; Freeborn, Minnesota; Burt, Nebraska; Rice, Kansas; Cedar, Iowa; Crawford, Illinois; Boone, Indiana; Fairfield, Ohio.

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During the 2015/16 marketing year, the U.S. Department of Agriculture (USDA) estimates that the states of the former Soviet Union excluding Latvia, Lithuania, and Estonia (FSU-12) will export a record 45 million tonnes of wheat.

Together, Russia and Ukraine account for 75 per cent of wheat production and 85 per cent of wheat exports in FSU-12.

If USDA’s October exports forecast is realized, the percentage of global wheat trade accounted for by FSU-12 in the 2015/16 marketing year will reach an all-time high of 28 per cent, narrowly topping 2009/10’s record of 27 per cent.

World wheat production has nearly doubled over the past 30 years, though the percentage by FSU-12 has been relatively stagnant.
But since the mid 1990s, Black Sea farmers have nearly quadrupled both their share of world wheat exports and the percentage of yearly supply that they export.

This has introduced previously nonexistent competition for major wheat exporters including the United States, which used to be the breadbasket of the world. That title now belongs to the Black Sea, as it has emerged as the largest wheat-exporting region on the planet.

With record wheat production expected this year out of the Black Sea combined with favourable trends in prices and forecasts, the record export forecast is not hard to believe. And the trend has staying power.

Burst onto the market
Historically, the U.S., Canada, Europe, Argentina and Australia made up 96 per cent of the wheat market.

But since 1980, market share trends in the five are either flat or decreasing, most notably in the U.S., which is expected to account for only 14 per cent of global wheat exports this year.

In the meantime, FSU-12 has crept into the picture and this year’s market share projection of 28 per cent towers over the EU at 21 per cent. The EU is expected to export 33 million tonnes of wheat this year compared to FSU-12’s estimated 45 million. That would easily top last year’s record of 40 million tonnes. USDA estimates FSU-12 at up four per cent on the year, with Russia up by three per cent and Ukraine up a whopping nine per cent.

Ukraine has not only increased wheat exports every year, but has done so by an average of 30 per cent per year, even with the drought-marred harvest of 2012. Net volume over the same period has also increased in Russia but by half the rate.

Thomson Reuters data seemingly confirms Ukraine’s strong charge towards the record 15 million-tonne target for the current year. Between July 1 and Oct. 20, wheat exports were up by nineper cent over the same period in 2014.

Russia is a bit more complicated. Although Thomson Reuters data suggests wheat exports since July 1 are nearly flat on the year, other sources put them down by as much as 18 per cent from 2014.
A year-on-year decline in Russian wheat exports to date would most likely be blamed on the export duty, which was introduced in December 2014. Despite the tax being unexpectedly introduced mid-marketing year in 2014/15, total Russian wheat exports ultimately overshot initial expectations despite the downside fears. And the gentle strengthening in the rouble over the past two months may have helped attract more buyers.

On Oct. 28, the Russian Agriculture Ministry announced the duty could be cancelled or modified as soon as the foreign exchange rate has stabilized. If changes come relatively soon, exports could drastically pick up pace assuming that cash prices also remain stable.
Cash prices at major ports worldwide, which are at relative five-year lows, seem to reflect the abundance of global wheat supply and therefore support larger export volumes.

Ukrainian and Russian prices have rendered Black Sea milling wheat as particularly attractive when compared to the U.S., as it has been offered at a discount of between $10-$50 since May. And Russian export prices are up to 20 per cent lower than they were last year at this time, perhaps somewhat easing the duty headache.

Average wheat yields in Russia and Ukraine have been on a convincing upward trend over the past decade and combined with stable sown area, Black Sea wheat production will continue to be large and competitive going forward, barring an extreme disruption such as widespread drought. Unless the situation significantly changes, the Black Sea is here to stay and will likely continue to cement its seat at the top of the wheat market over the coming years.

<Karen Braun is a Reuters market analyst. The views expressed are her own.>

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