The U.S. planting season is well underway, and trade is now starting to re-evaluate what we may see for actual acres this year. The most interest remains in corn as years with quick planting paces tend to see elevated corn acres. The USDA is using a corn planting number of 95.3 million acres in balance sheets, a 4.7 percent increase from last year. Some analysts feel this could be even higher.

While possible, not all the U.S. is seeing favorable planting conditions, and we are already hearing that some early planted corn fields need to be re-seeded. There is also a trend for added corn plantings in years such as this to be lower yielding. The corn-soybean spread has narrowed recently and will also prevent acres from shifting to corn.

Brazilian corn and soybean production this year is going to be record sized and alter global trading patterns. Weather was not perfect in Brazil this year, but same as in the U.S., genetics are allowing crops to get by in less than ideal conditions. Brazilian analysts are now predicting higher gain trade with China, including agri-business giant Cargill. China has stated they do not need U.S. grain imports, and record crops in Brazil mean imports will likely increase from that source if needed. Brazil’s record soybean crop is also likely to cause a further decline in U.S. market share for China needs. The U.S. currently has a 21 percent Chinese soybean market share, down from 40 percent in 2016.

Brazil’s soybean harvest is winding down for the season, but basis values remain weak. Demand for Brazil’s soybeans has slowed as China is now reporting adequate soybean reserves. Crush margins have dropped in China, further diminishing their soybean import interest. News that China will be trimming soy meal usage in feed rations is also causing uncertainty in the global soy market.

The uncertainty surrounding the 45Z biofuel blending credits is having more of an impact on the U.S. soybean crush industry. Agribusiness leader ADM has announced they will be closing a crush plant in South Carolina to streamline their operations. Soy crushers remain in the dark on future blending credits, making it difficult to predict demand. This news follows the closure of several biodiesel plants in Iowa due to the same market unknowns. If this continues, the USDA will start to adjust their soybean demand figures.

An interesting development is taking place at Chinese ports. It is taking incoming soybean vessels 20 to 25 days to clear import customs. This compares to last year’s wait of 10 to 15 days. It is not uncommon to see China stretch out import clearance when the country has ample commodity reserves, but China had seen its soybean inventory drop to minimal levels just a month ago. These delays are the result of big Brazil deliveries once their harvest got underway. Soybean processors in China are forced to absorb the high demurrage charges these delays generate and have dropped crush returns into negative territory.

China has also released its 2025 crop estimates. Corn production this year is forecast to be relatively unchanged from last year at 295.5 million metric tons. Soybean production is expected to increase 2.5 percent to 21.17 mmt. China’s wheat crop is forecast at 141.36 mmt, a 1 percent increase from last year. These increases align with China’s desire to become more self-sufficient on commodity needs.

China has announced more measures to lower its need for feed grain imports. For one, China is going to lower its soy meal content in feed ration to 10 percent. This is down from the 14 percent used just 3 years ago. China is also going to reduce feed grain usage in rations to 60 percent. Officials in the country claim this will help them avoid imports and become more self-reliant on commodity needs. While possible, the question is what impact this will have on livestock production in the country. While livestock feeders are using more modern methods of production, cutting rations may slow gains.

A positive outcome of the U.S. trade tariffs on China has been the halt in used cooking oil imports. China has been shipping the U.S. large volumes of UCO to be used in biofuel production. This has been hotly contested in the U.S. market as farm groups claim the UCO is being imported below its cost of production and is not used at all. They claim it is simply China dumping low-grade vegetable oil into the global market. In 2024 the U.S. imported $1.1 billion of China’s $2.64 billion UCO exports.

One thing with the cattle market worth noting is the shift we are starting to see in weights. Dressed carcass weights over the past week averaged 911 pounds. This is up 20 pounds from last year, but this is much closer than the 50-pound difference from just a few months ago. Fewer cows are making their way into the supply line, allowing weights to rebound. Feeders are also getting more current on inventories, helping close the weight gap. Even with these heavier weights the U.S. beef supply is now only 1 percent above last year as consumer demand remains strong.

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