The long-awaited planting intentions report indicated U.S. farmers will seed more corn and wheat acres than a year ago and nearly the same number of soybean acres. Corn acres came in at the top side of trade expectations at 92 million for the 2023/24 growing season. This was 1 million more than predicted in the Ag Outlook Forum and 3.42 million more acres than last year. Soybean acres were equal to the Forum projection of 87.5 million, which is up 50,000 acres from last year. U.S. total wheat acres are forecast at 49.9 million, 400,000 more than the Forum indicated and 4.16 million more acres than last year. The data collected for this report was taken in February and did not factor in recent weather which may cause planting delays.

The March 1 stocks data favored corn and soybeans over wheat. As of March 1, the U.S. had 7.4 billion bu (bbu) of corn in reserve, which was just under the average trade guess and 358 million bu (mbu) less than a year ago. Soybean inventory totaled 1.685 bbu, which was at the bottom end of trade guesses and down 247 mbu from a year ago. Wheat inventory was above the average trade guess at 946 mbu, but down 83 mbu from last year. These inventory numbers indicate the U.S. still needs to ration soybean demand.

The International Grains Council has released its balance sheet projections for the 2023/24 marketing year. The IGC is predicting total world grain production at 2.282 billion metric tons (bmt) this year compared to 2.25 bmt in 2022/23. Grain consumption is also forecast to increase from 2.26 bmt to 2.288 bmt, cutting ending stocks to 580 mmt. Global corn production is expected to be nearly equal to usage at 1.2 bmt. Wheat production for the 2023/24 year is estimated at 787 mmt, down from 801 mmt due to the loss of Black Sea crops.

There has been considerable talk in the market over the record volume of ships waiting to load new crop Brazilian soybeans, with several analysts claiming this is from slow harvest and logistic issues. While Brazil has experienced delays, this is not the main reason for the growing number of vessels waiting for port space.

Every year when the South American harvest starts shippers start staging vessels to load, even if it is not for immediate use. Many of these ships simply have no other place to go at the present time and are waiting for their scheduled loading times.

There are currently 56 vessels near Brazil’s loading terminals and another 100 are expected to arrive in the next few weeks. Many of these are also cargo ships waiting to unload. At the present time the wait for port space in Brazil is 35 days which is not uncommon for this time of year.

One of the main fundamental hindrances for the U.S. commodity market right now is the price spread between us and other sources in the global market. This is most notable on soybeans where Brazilian offers would pencil into the U.S. market. This makes it hard to justify an importer taking our offers in the spot market. Brazilian meal is also cheaper than the U.S. by nearly $50 per ton. The U.S. is cheaper on corn from Brazil by 85 cents per bushel though, at least until the Safrinha crop will be available in July. The U.S. is seeing pressure from cheap wheat out of the Black Sea however, which is being offered at a lower value than our corn. Given the strength in the U.S. dollar versus other currencies, these spreads are even wider at times.

The short soybean crop in Argentina is starting to impact the country’s crush industry. Officials in the country claim just 30 percent of its crush capacity is currently being utilized. This is partly from lower yields, but also from slow farmer selling as farmers expect to see higher returns later in the marketing year. Some crushers have also slowed operations due to negative crush margins given the spread between products and raw soybeans. Crushers do report still having 6 mmt of old crop soybeans in reserve and expect to import 7 mmt from Brazil to keep crush volumes elevated.

The building global banking issues may have a longer lasting impact on agriculture than initially thought. The main issue in the future will be credit as lenders will need to tighten their borrowing to build credit. For a producer this may mean less financing and higher interest rates. This could easily impact future production. Tightening credit may also affect global commodity trade if buyers struggle to get financing for needs. This has been an issue for developing countries for the past several months. An importer that has seen the most fallout from credit recently has been Egypt and this has slowed their wheat buying.

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