Markets: Corn & Wheat Exports Compared to Last Few Years Prior to the Next WASDE

In the last blog I wrote, I looked at soybean exports to China for the 2024/25 crop year. The intent was to look at how accurate the current USDA’s target for soybean exports were (given current pace of export sales to China, the largest importer of soybeans in the world). As a reminder, currently the USDA is working with exports of 1.85 billion bushels of soybeans. That would be an increase of 150 million bushels from the current estimate for 2023/24.

📷by JSA

While it is very early in the marketing year, I thought it would be a good exercise to look at corn and wheat exports in comparison to the last few years prior to the next WASDE report which is scheduled to be published Thursday, September 12^th.

Corn

In the USDA’s August WASDE report, exports to all destinations was increased by 5 million bushels to 2.3 billion bushels. The estimate for the 2023/24 crop year was pegged at 2.25 billion bushels, a sharp increase from the 2022/23 crop year at 1.662 billion bushels. The increase in exports over the last 2 years makes sense as corn prices are considerably lower than they were in 2022 and early 2023. 

As a reminder, the “marketing year” for corn and soybeans is September through August, meaning that the export inspections report that we get from the USDA on Mondays will now be reporting shipments of the 2024/25 crop. Sales have been occurring for the 2024/25 crop year for some time, however. In the most recent report that was released Friday, September 6^th, the export sales for 2024/25 crop year had reached a cumulative of 442.538 million bushels or a shade under 20% of the USDA’s target. More importantly, when compared to our export sales 1 year ago at this time, we are ahead of the pace by 34.7%. At the same time, we lag the 5-year average by just under 7%. Bottom-Line for corn exports is that we are “on pace” as of right now. But make no mistake about it, there is a lot of time to go. And in between now and the end of next August is North American harvest, South American growing season, another North American growing season and oh yeah, an election. In other words, a lot can happen between then and now.

Wheat

In the August edition of the WASDE report the USDA had estimated the exports for the 2024/25 crop year at 825 million bushels. A sharp increase from the year prior at 707 million bushels. Again, this makes sense since prices are currently much lower than they were just 18 months ago. The wheat year in the US begins on June 1 and ends May 31 so we are deeper into the new crop marketing season in wheat than we are in corn and soybeans. So far year-to-date export sales are 37% above year-ago levels, but only 2% above the 5-year average for this time. Once again several of the same caveats mentioned above will hold true, it is a long time until the end of May and there are a host of factors that will play a role on exports moving forward. 

Why Does any of this Matter?

The key throughout the year is to compare sales that have been booked to the inspections data that is released on Mondays. As we get closer to the end of the marketing year, the two numbers should converge. Analysts play close attention to exports because it is the most “elastic” demand factor. Simply put, usage of corn for ethanol, animal feed and human consumption is less responsive to price changes. Same goes for wheat. We tend to buy the same amount of wheat for human consumption regardless of the price. The US is known for the quality of products whether it is corn, soybeans, wheat, cotton, or beef. But many of the world’s importers are willing to buy a lower quality product if the price is right. For the upcoming crop year, supply is almost known, the biggest unknown to ending stocks will soon become exports. 

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