Heavy international competition is cutting into US wheat and soybean exports alike.
Last week’s monthly USDA supply-demand update lowered the 2023-24 US soybean export forecast by 35 million bu from August to 1.79 billion bu, well down from the 2022-23 projection of just under 2 billion and 2.15 billion in 2021-22.
The numbers bear out the September export reduction. According to the USDA’s monthly Oil Crops Outlook, US soybean export sales commitments for 2023-24 amounted to just 586 million bu through the end of August - 35% lower than the same time last year. Perhaps even more worrisome, sales to China, the world’s top importer, were down a whopping 50% from last year at 234 million bu.
For soybeans, much of the competition is coming from Brazil, which harvested a 2022-23 crop of 156 million tonnes, up 19.5% on the year. Amid the larger supply, Brazil’s summer soy exports were record high, with the USDA suggesting the country’s exports will continue to be “robust” into the fall. “While exports historically tend to decline from September to January, Brazil’s soybean supply is large,” the USDA said.
Meanwhile, lower-priced supplies from Russia, as well as the EU, are weighing on American wheat exports, especially shipments of Hard Red Winter.
In fact, with a 10-million reduction in the September supply-demand update, US exports of Hard Red Winter wheat are now projected at just 155 million for 2023-24, the lowest since records began in 1973-74, the USDA said in its September Wheat Outlook. Historically, Hard Red Winter has been the leading class of U.S. exports, but in this season, it is forecast as the third largest class of U.S. exports, being surpassed by both Hard Red Spring and White wheat.
Offsetting increases for other wheat classes means total projected US wheat exports for 2023-24 were unchanged from August at 700 million bu, but that is still down from 759 million in 2022-23 and 796 million in 2021-22.
As for corn, the USDA maintained its 2023-24 export forecast at 2.05 billion bu in September, up from 1.66 billion in 2022-23 but still below 2.47 billion in 2021-22.
