Exportation is one of the more unpredictable aspects of crop markets as we approach the end of 2023.Thank you for reading this post, don't forget to subscribe!
According to Jerry Gidel, an analyst at Midland Research, weekly sales for export have recently been “strong,” and China may need to turn to the United States instead of South America for future purchases.
“In the final months of 2023 and the first quarter of 2024, China will likely have to rely on the US for corn due to limited supply from South America,” stated Gidel. “The low prices this autumn have resulted in substantial sales and shipments of US corn thus far.”
Wheat is not experiencing robust export growth in the corn market, as Russia is taking an assertive approach to the marketing of wheat.
“This has put the market on the defensive,” Gidel explained. “This week’s US autumn sowing remained on its typical trajectory, but the initial crop ratings from the USDA were mixed.”
Gidel projected that the forthcoming USDA supply and demand report will indicate lower overall soybean yields, resulting in an estimated 20 million bushel reduction in the US crop. Corn is expected to decrease by 0.8 bushels per acre, which will also cause stocks to dwindle.
“This may lead to swift price hikes,” Gidel stated. “However, the higher figures may not lead to a massive sell-off. Producers will need to sell their crops, but they are dissatisfied with the current low prices.”
According to Gidel, harvest in the Midwest is almost complete, which is helping to slow down price declines. He also expressed concerns about the ongoing military conflict in the Middle East, which has impacted crop prices. As the Thanksgiving holiday approaches within the next two weeks, the markets may receive some support as companies aim to meet their monthly requirements earlier than usual.
“Commercial seasonal needs should bolster prices before the North Mississippi barge system ceases operations at the end of the month,” Gidel commented.
When looking at marketing plans for 2024, Gidel advises producers to sell 50% soybeans, 30-40% corn, and 45% hard red wheat.