U.S. weather conditions are having more of an impact on daily price discovery, and depending upon what region you are in, the results vary. The Corn Belt has areas of both excessive moisture and drought. This is the same in many parts of the United States. One region that is getting more attention is the U.S. Delta, where ongoing rains and wet fields are expected to slow seeding, although at the present time corn planting is ahead of average in all reporting states. While rains may eventually slow corn planting it is too early to be worried about acreage loss.

Where corn acres may be affected by soil conditions is in the Upper Plains, where heavy snowpack is being seen. It will take time for this snow to melt and as it does it will leave fields saturated. This is most noted in the Dakotas and into Minnesota, where corn production has been impacted by adverse weather for the past several years. Again, it is too early to predict acreage losses, but it will take near perfect spring conditions to reach the level of corn seedings that trade is predicting.

At the same time, a lack of precipitation in the Southern Plains is leaving 51 percent of the winter wheat crop in drought. Now that the La Nina weather event has officially ended, we may see a return to normal conditions. The question is how long it will take for these to develop.

Farmer sales of this year’s crops in Argentina have been slow, which is not that surprising given the production issues the country has seen. The more drought cuts production in Argentina, the less interest farmers are showing in marketing. One reason is that farmers believe commodity values will continue to work higher, but concern over being able to fill contracts is also a factor. Argentina is already importing soybeans from Brazil to cover needs, and this will cover the lack of farmer sales for now. Sources in Argentina believe it may take another Peso Exchange program to encourage farmer sales. The question is if the government has the funding to offer another incentive deal at this time.

The main struggle for the corn complex this year has been poor demand. This is from many of the United States’ traditional buyers going elsewhere for needs. Two of the most noted are Japan and Colombia, who combine for 25 percent of U.S. corn exports. Corn sales to Japan this year are down 56 percent from normal, and Colombia’s imports are down a huge 89 percent. This loss of business is a primary reason why U.S. corn exports in January were a three-year low for the month. If we take China out of the equation, U.S. corn demand is at a 10-year low. This is why the loss of Chinese buying has caused U.S. sales drop as far as they have.

A concern in the U.S. soy complex lately has been building soy oil reserves due to a lack of export demand. While this has been weighing on soy oil, domestic demand has been preventing stocks from becoming burdensome. This is mainly from biofuel production, which has increased 258 percent from December 2021 through December 2022. Biofuel production totaled 184 million gallons in December 2022 for a yearly use of 2.85 million gallons. Consumption is also on the rise, increasing 20 percent in 2022. As these production and demand levels increase, so will U.S. crush capacity.

A rising hindrance for global trade is climbing freight rates. This is mostly from demand as many of the world’s vessel are placed and waiting to load. One of these regions is in the Black Sea, where 115 vessels are currently waiting to either load or be inspected. There is also a record 14 mmt of vessel capacity waiting to load Brazilian soybeans. Many of these Brazilian vessels are going to be loaded for China, where record soybean imports are projected for March and April. These rising rates and lower vessel availability are making it more difficult for other buyers, and some are now turning to the commodity source with the cheapest freight, not the cheapest product.

The U.S. attaché in Mexico has updated the country’s beef production forecast. The Mexican cattle herd is expected to rise to 18.25 million head by the end of 2023, up from the current 17.95 million head. Cattle slaughter for the year is projected at 7 million head compared to the USDA forecast of 6.93 million. In 2022, Mexico processed 6.78 million head of beef. This is expected to give Mexico 2.25 million metric tons (mmt) of beef which is equal to the USDA forecast and above last year’s 2.18 mmt.

The attaché also updated its Mexican hog inventory data. The attaché believes Mexico’s hog herd will reach 12.95 million head by the end of 2023, up from a current 12.56 million head inventory. Mexico’s yearly slaughter is expected to total 21.25 million head compared to last year’s 20.4 million. Pork production in 2023 is expected to match the USDA estimate of 1.6 mmt.

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