World Markets

Grain Prices Rise As Global Financial Markets Look Past Venezuela

Mon, 05 Jan 2026 19:14:01 GMT

Animal spirits were intact across global financial markets Monday as investors took the U.S. ouster and capture of Venezuelan President Nicolas Maduro over the weekend in stride, leaving grain and soy complex traders to focus on exports and South American weather after a weak finish to a holiday-shortened week.

March corn was up 5 1/4 cents at $4.50 3/4.
March soybeans rose 15 cents to $10.60 3.4, with March meal and March soybean oil moving higher.
March SRW wheat was up 6 cents at $5.12 1/2, with March HRW wheat up 8 1/4 cents at $5.23 1/4.

Maduro and his wife were due to appear in federal court in New York Monday to face narco-terrorism charges. The military operation that led to his capture on Saturday led investors to eagerly await the kickoff of Asia-Pacific trade Sunday night to see if the geopolitical jitters would rattle markets.

Gold and the U.S. dollar, both traditional havens, rose in overnight trade and remained higher Monday. But Asian equities also surged overnight and U.S. stocks opened higher on Monday, with the Dow Jones Industrial Average touching a record as it pushed above the 49,000 milestone for the first time. The S&P 500 and Nasdaq were also higher. Oil company stocks were among upside leaders. The stock market gains showed that while there may have been some haven-related hedging activity boosting gold, overall risk appetite remained intact.

Crude-oil futures remain the main event, initially falling in Sunday trade after President Donald Trump on Saturday said the U.S. “run Venezuela” and work with oil companies to invest in Venezuela’s long-neglected production infrastructure. “We’re in the oil business,” said Trump, who pointed to increased sales of crude to global customers. Venezuela pumps less than 1 million barrels a day of crude but has the world’s largest proven oil reserves at 303 billion barrels. Crude futures later pushed back into positive territory, with analysts citing continued uncertainty around Venezuela.

West Texas Intermediate crude for February delivery, the U.S. benchmark, was up 67 cents, or 1.2%, at $57.99 a barrel.
March Brent crude, the global benchmark, was up 64 cents, or 1%, at $61.39 a barrel on ICE Futures Europe.

Secretary of State Marco Rubio on Sunday appeared to play down direct control of Venezuela, saying the administration would maintain a military “quarantine” that gives the U.S. sway over the nation’s ruling regime.

“There’s a quarantine right now in which sanctioned oil shipments – there’s a boat, and that boat is under U.S. sanctions, we go get a court order – we will seize it,” Rubio told CBS’s Face the Nation program Sunday morning.

So what matters for oil prices from here? It comes down to what kind of transition of power takes place in Venezuela, said Warren Patterson, head of commodities strategy at ING, in a note.

“Clearly, a prolonged and messy transition increases the risk for supply disruptions in the short term. However, for now, Vice President Delcy Rodríguez has taken over. While her rhetoric was initially defiant, it appears to be shifting already, with statements that Venezuela and the U.S. should work together.,” he wrote. “A smooth transition, with a government which is also more willing to cooperate with the U.S., likely leaves more downside for the market.”

In contrast, a messier transition would put around 900,000 barrels a day of supply at risk, most of which goes to China with U.S. refiners importing a little under 150,000 barrels a day, Patterson said. Losing that supply would justify some upside to current forecasts but the impact would likely be limited given a well-supplied market. Some supply losses have already been priced in since Venezuelan oil exports were pressured in December due to the U.S. blockade of sanctioned tankers moving in and out of the country, he noted.

Get more daily news, market insights and sell alerts with a Pro Farmer subscription. View subscription specials .

Canada Rail Stoppage Poised to Disrupt North American Agriculture

Tue, 20 Aug 2024 20:49:44 GMT

A looming stoppage of freight railway operations across Canada would disrupt North America’s agricultural supply chain, snarling shipments of everything from wheat to fertilizer and meat.

Unless last-minute labor agreements are reached, both Canadian National Railway and Canadian Pacific Kansas City, an effective duopoly, will shut nearly all freight rail services in Canada for the first time at midnight on Thursday.

Canada is the world’s top exporter of canola, used in food and biofuel, and of potash fertilizer, as well as the No. 3 wheat exporter. While a lockout or strike would directly involve 10,000 Canadian employees of the railroads, not those in the U.S., it would have knock-on effects on the U.S. economy due to the countries’ criss-crossing rail lines.

Nearly three dozen North American agriculture groups, in a joint letter to the U.S. and Canadian governments on Monday, urged action to avoid a stoppage.

“The impact of a strike would be particularly severe on bulk commodity exporters in both Canada and the United States as trucking is not a viable option for many agricultural shippers,” the letter said, citing large volumes and vast distances.

The rail operators have said lockouts will begin on Thursday. The Teamsters union, which is demanding better wages, benefits, and crew scheduling, has issued a Thursday strike notice to CPKC.

The stoppage will halt shipments of U.S. spring wheat from Minnesota, North Dakota and South Dakota to the Pacific Northwest for export, said Max Fisher, chief economist at the National Grain and Feed Association.

CPKC ships grain from the Dakotas and Minnesota to west-coast export terminals via Canada, according to the U.S. government.

U.S. farmers still have nearly two-thirds of the spring-wheat crop to harvest, the U.S. Department of Agriculture said on Monday. Soy, corn and canola harvests are still a few weeks away in North America.

Canada’s prairie elevator network would run out of storage capacity within 10 days of a stoppage, said Mark Hemmes, head of Quorum Corp, which monitors Canadian grain handling and transportation.

Shippers are also concerned about U.S. corn products heading to Canada. In 2023, Canada was the top destination for U.S. ethanol exports, and almost three-quarters traveled by rail, according to USDA.

“We just can’t have the railroads not operating,” Fisher said.

The U.S. exported $28.2 billion of agricultural products last year to Canada, its third-largest destination for agricultural exports behind China and Mexico, USDA said.

The U.S. imported $40.1 billion of Canadian agricultural products last year, making Canada the second-largest origin of U.S. agricultural imports behind Mexico, the agency said.

About 85% of the 13 million metric tons of U.S. potash imports last year came from Canada, nearly all of which crossed by rail, according to USDA.

‘No Good Time’

U.S. corn farmers apply fertilizers in fall and spring, but potash imports from Canada are consistent throughout the year, said Krista Swanson, chief economist for the National Corn Growers Association.

“Given constant trade flows and the importance of the trade relationship between the two nations, there is no good time for this to occur,” Swanson said.

The railways move an average of 69,000 tons of fertilizer product per day, equivalent to four to five trains, said Fertilizer Canada spokesperson Kayla FitzPatrick. Disruptions will cost the industry C$55 million ($40.34 million) to C$63 million per day in lost revenue, not including logistical and operational costs, she said.

Canadian meat producers warned that a rail stoppage would result in millions of dollars in losses and waste.

The Canadian Meat Council and Canadian Pork Council said some processing plants expect to lose up to C$3 million a week, and noted these facilities would be forced to shut down within seven to 10 days of a rail stoppage. Once the railways resume service, it would take two to five weeks for plants to return to normal capacity.

There is concern that the movement of Ontario soybeans to export markets, primarily Japan, will completely stop just before the harvest, said Crosby Devitt, CEO of Grain Farmers of Ontario.

With crop-shipment delays lasting beyond a week, companies must pay contract penalties and demurrage for ships waiting for grain to arrive, piling significant cost onto the industry, said Wade Sobkowich, executive director of the Western Grain Elevator Association.

“We’ll be playing catch-up for the rest of the harvest year, till next July,” he said.

($1 = 1.3634 Canadian dollars)

(Reporting by Tom Polansek and Karl Plume in Chicago and Promit Mukherjee in Ottawa; Editing by Rod Nickel)

Economic Uncertainty in China Slows Demand for U.S. Corn and Soybeans

Tue, 30 Jan 2024 22:22:14 GMT

Signs of economic slowdown have been mounting in China for months, and some experts say the country is teetering on a recession. On Monday, news broke of the insolvency of property giant China Evergrande Group, the world’s most indebted real estate developer, with more than $300 billion of total liabilities.

Kent Beadle with Paradigm Futures says Evergrande has been in trouble for a very long time but was told by a Hong Kong Court it’s time to liquidate. The news has spurred fears the Chinese economy might significantly dip, which would have some impact on demand for U.S. ag commodities.

Last week, the Chinese government surprisingly stepped in with additional economic stimulus efforts announcing fund injection of 2 trillion yuan to stabilize the stock market. Plus, China’s Central Bank made the biggest cut in more than two years to the amount of cash banks must hold as reserves to free up 1 trillion yuan to the market.

The market response was initially positive, but it didn’t hold. Mike Zuzulo with Global Commodity says that’s because Asian markets on Thursday night and Friday morning just didn’t get done what they needed to.

“The Hong Kong stock market didn’t rally above resistance and the offshore Chinese currency didn’t rally above resistance either, so I felt like the macro demand side of the equation was a really big player,” he explains.

The World Bank is projecting China’s growth or GDP at 4.5% this year, the slowest in 30 years. This could curb U.S. exporters further in 2024.

3 Trends to Consider As You Make Risk-Management Decisions for the Year Ahead

Thu, 11 Jan 2024 22:31:16 GMT

Consider these trends as you make risk-management decisions for the year ahead.

1. Assume a record national average corn yield.

USDA’s trend-line yield will be revealed in February, but it will be near 181 bu. per acre. That’s despite the U.S. national average yield only topping 176 bu. per acre three times.

A record yield seems likely if the season starts with an El Niño influence, but a quick turn back to La Niña for the second half of the growing season could stop the crop from catching the trend-line yield. Another crop record is unlikely due to fewer acres than in 2023, but the beginning stocks of more than 2 billion bushels and record corn yield potential is incentive to sell rallies in new-crop corn futures.

At the same time, you might want to check the U.S. Drought Monitor map. Those areas of extreme and exceptional drought are real and need to be corrected in early 2024 to top 2021’s record yield.

2. Corn acres will be down but by how much?

Planted corn acres in 2023 reached an impressive 94.9 million, while soybean acres were a surprisingly low 83.6 million. With 2023/24 corn carryover projected at just over 2.1 billion bushels (stocks-to-use ratio of 14.7%) and soybean carryover expected at 245 million bushels (stocks-to-use ratio of 5.9%), expectations are the market would force acres from corn to soybeans in 2024.

However, corn revenue per acre still beat soybeans and spring wheat in most areas of the Corn Belt at the end of 2023. That’s not much “forcing” of acres from corn to soybeans. Because 2023 was a heavy corn year, a return to “normal” rotations (fewer corn-on-corn) could pull corn acres down to about 91 million.

Trade expectations are that at least 3 million of those corn acres will move to soybeans. Those acreage changes from a year ago would do little to change the strategy to sell rallies in new-crop corn and soybean futures.

3. Brazil has a crop problem.

A late planted 2023/24 Brazilian soybean crop will delay understanding of crop size until late February, but there is little question some damage was done to the crop. Instead of a 163-million metric ton crop, many put the estimate at 155 mmt to 159 mmt. Most had a downside bias on crop estimates due to drought conditions, primarily in Mato Grosso.

A late soybean harvest is also expected to cut safrinha corn acres by at least 10% from last year.

The sizes of Brazil’s corn and soybean crops were the greatest unknowns for the U.S. markets at the end of the year. That uncertainty is reason to expect some rallies in early 2024, but even those should be used to advance old- and new-crop corn and soybean sales.

More Than $653 Million to be Invested to Improve 41 Ports

Wed, 29 Nov 2023 17:10:44 GMT

More than 2.3 billion short tons of domestic and international U.S. commerce moves by water. In an effort to help grow capacity and increase efficiency at coastal seaports, Great Lakes ports and inland river ports, the U.S. Department of Transportation’s Maritime Administration is funding 41 projects worth more than $653 million under the Port Infrastructure Development Program (PIDP). The improvement projects, part of President Biden’s Investing in America agenda, are focused on strengthening supply chain reliability, creating workforce development opportunities, speeding up the movement of goods, and improving the safety, reliability and resilience of ports.

Here’s a list of the 41 port projects:

ALASKA

1. 40-Acre Deep Water Port Development, Wrangell ($421,000)
2. Construction of a New Small Boat Harbor, Yakutat ($8,963,522)
3. Cape Blossom Port Planning Project, Cape Blossom ($2,455,485)
4. Arctic Deep Draft Port Utility Services, Nome ($11,250,000)
5. Jakolof Bay Dock Replacement Project, Seldovia ($2,376,646)
6. Metlakatla Port Improvements Project, Annette Island ($3,384,439)
7. Dock Infrastructure Replacement in Cold Bay ($43,376,746)

ARKANSAS

8. River Valley Slackwater Harbor Project, Fort Smith ($15,096,000)

CALIFORNIA

9. North Harbor Transportation System Improvement Project, Long Beach ($52,633,331)
10. Redwood Marine Terminal and Baywide Master Plan Project, Eureka ($8,672,986)
11. Port of Hueneme Parking Structure Planning Project, Oxnard ($2,000,000)
12. National City Marine Terminal Berth Rehabilitation & Electrification Project, San Diego ($11,250,000)

CONNECTICUT

13. New London Ferry/Cargo Terminal Dolphin Replacement Project, New London ($1,600,000)

DELAWARE

14. Edgemoor Container Terminal -- Container Yard Project, Wilmington ($50,000,000)

FLORIDA

15. Port Panama City East Terminal Phase Two Expansion Project, Panama City ($11,250,000)

HAWAII

16. Kawaihae Harbor Improvements, Kawaihae Harbor ($23,460,000)

IOWA

17. Port of Blencoe Infrastructure Development Project, Blencoe ($10,262,240)

ILLINOIS

18. Shawneetown Regional Port Revitalization Project, Shawneetown ($10,120,000)

KENTUCKY

19. Conveyor Upgrade and Replacement Project, Hickman ($3,295,879)

MASSACHUSSETTS

20. Leonard’s Wharf Reconstruction & Extension Project, New Bedford ($24,404,000)

MARYLAND

21. Baltimore County Offshore Wind Manufacturing Hub, Baltimore ($47,392,500)

MAINE

22. Portland IMT Reefer Yard Modernization Project, Portland ($14,240,000)

MINNESOTA

23. Bulkhead Rehabilitation and Grain Barge Mooring Replacement Project, Red Wing ($1,989,246)
24. Wabasha Barge Terminal Project, Wabasha ($2,545,297)

MISSOURI

25. La Grange Multimodal Port Enhancement Project, La Grange ($11,091,844)

MISSISSIPPI

26. Port of Rosedale Multi-Modal Expansion Project Phase I, Rosedale ($8,742,816)

NORTH CAROLINA

27. North Gate Relocation and Access Optimization, Wilmington ($10,950,805)

NEW JERSEY

28. Reconstruction of Berth PN-308 at Port Newark, Newark ($32,000,000)
29. Wind Port at Paulsboro – Phase 2, Paulsboro ($20,494,025)

NEW YORK

30. Port of Ogdensburg Terminal Expansion Project, Ogdensburg ($5,107,649)

OREGON

31. Ko’Kwel Wharf Improvements Project, North Bend ($7,729,650)
32. Pier 2 West Rehabilitation Project, Astoria ($25,315,758)
33. Operational Capacity Improvements at the Port of Newport, Newport ($3,444,100)

RHODE ISLAND

34. Stern Off-Load Ramp Construction Project, North Kingstown ($3,880,000)

TEXAS

35. Cedar Port Infrastructure Development Project, Baytown ($10,893,901)
36. Velasco Terminal Sustainable Expansion Project, Freeport ($15,958,380)
37. West Basin Bulkhead Project, Bay City ($9,922,475)

U.S. VIRGIN ISLANDS

38. Reconstruction and Modernization of the Wilfred “Bomba” Allick Terminal, St. Croix ($22,400,000)

VIRGINIA

39. Norfolk Offshore Wind Logistics Port, Norfolk ($39,265,000)

WASHINGTON

40. Port of Tacoma Husky Terminal Expansion Part One Tacoma ($54,233,330)

WISCONSIN

41. Agricultural Maritime Export Facility – Phase 2, Milwaukee ($9,276,352)

USDA Says Trade Efforts Are Working to Build Markets Abroad

Tue, 21 Nov 2023 20:26:40 GMT

USDA announced last week it is introducing the Regional Agricultural Promotion Program (RAPP) to support continued growth of U.S. agricultural exports and to also introduce U.S. agricultural products to new markets.

The agency will invest $1.3 billion to support that market diversification effort within a public-private partnership with the agricultural sector, according to Alexis Taylor, USDA Trade and Foreign Agricultural Affairs Under Secretary.

Specifically, Taylor told AgriTalk Host, Chip Flory, that RAPP will provide assistance to eligible organizations that conduct market promotion activities, including ones to address existing or potential non-tariff barriers to trade.

Headway In India

Taylor told Flory the Biden administration has tallied numerous trade policy wins in 2023. Some of the key recent wins, she referenced, have been in India, which has been difficult to access with U.S. agricultural goods.

“They have what they would say are 800 million small-holder farmers. Imagine that – more than twice our population in the whole United States,” she said. “They increasingly are looking to develop an industrialized (society) and determine how they move away from subsistence farming to a better economic model. As they’re trying to wrap their arms around how to make that move, using tariffs has been one of the ways they’ve protected their farmers.”

Taylor said USDA has worked closely with India to reduce tariffs and has secured nine tariff reductions in 2023. To date, the agency reports India has dropped retaliatory tariffs on apples, chickpeas, lentils, almonds and walnuts. The Indian government also has reduced tariffs for turkey, duck, blueberries and cranberries.

Steady Progress Cited

Four additional export market successes Taylor and USDA cite as having achieved this year include:
1. Canada approving legislative recognition of U.S. biofuels, maintaining the largest and most dependable export market for U.S. ethanol and biodiesel;
2. Japan renegotiating beef safeguard levels under the U.S.-Japan Trade Agreement, reducing tariffs and generating growth opportunities for $150 million in beef exports;
3. Brazil agreeing not to change import certification requirements, ensuring continued exports of U.S. milk, beef, and seafood; and
4. Mexico granting market access to U.S. potatoes following more than 20 years of engagement.

Looking ahead, Taylor told Flory one of USDA’s key objectives will be increasing the export of U.S. agricultural foods and products to countries in Africa.

“By 2051, one in four people on the planet will live on the African continent, and we cannot ignore this any longer,” she said. “We’re really hopeful that the (RAPP) program will provide some resources for our food and ag sector to be able to invest in some of these areas of the world.”

Taylor’s conversation with Flory, which took place during the annual National Association of Farm Broadcasters Trade Talk program in Kansas City, is available to listen to here:

AgDay TV Markets Now: Tommy Grisafi says Soy Complex Adds Brazil Weather Premium, Corn Reluctant Follower with Wheat as Anchor

China’s Sow Herd Declines for Tenth Consecutive Month

What Will the Reference Price Be in the New Farm Bill?

What's Behind the Soybean Sales? China Buys 110 Million Bushels Last Week and More Monday

Tue, 14 Nov 2023 14:42:55 GMT

President Joe Biden and Chinese leader Xi Jinping plan to meet Wednesday during the Asia-Pacific Economic Cooperation summit in San Francisco. That meeting is helping spur purchases of U.S. soybeans.

China bought around 3 MMT of soybeans or 110 million bushels from the U.S. last week, a volume that reportedly surprised the market. They added another 7.5 million bushels on Monday.

That’s even though they are more expensive than Brazilian supplies and processing margins are weak in China. The purchases are seen as a goodwill gesture ahead of Xi’s meeting with Biden.

Mike Zuzulo, Global Commodity Analytics, says, “My mindset is their pork industry is in tough enough shape. Their deflation is bad enough their consumer is stalled out since the zero COVID policy that they really don’t need to buy extra. What they’re probably looking and fishing for is some cash injection, some foreign direct investment, because that has been pulled out dramatically from the Chinese economy, and it’s really hurting them, and I think President Xi knows that.”

The meeting is also hoped to be the start of better trading relations between the U.S. and China. However, Zuzulo is concerned China is washing out of soybeans in Brazil and only coming to the United States because of weather concerns in South America.

He says, “My issue would be they will find another buyer if they can find it. It is very fortunate for the US soybean grower that we have this weather issue as we go to this meeting, because if we hadn’t had the weather in South America, I think we would not be able to be this kind of strength in soybeans.”

Meanwhile, the head of world trading at Cargill, the world’s largest agricultural commodities trader, indicates China is purchasing more than it needs for domestic use, signaling it’s seeking to build stockpiles. Other sources indicate that Sinograin has a dual role of crushing beans and managing reserve stocks for the government and Xi’s visit is the only logical reason Sinograin would pay a big premium over Brazil beans because crushers don’t pay above-market prices.

4 Reasons Why You Should Care About South America

Wed, 08 Nov 2023 21:58:53 GMT

Why should farmers in the U.S. care about South America? Here are four reasons, says Jon Scheve, president of grain at Superior Feed Ingredients:

1. Planting and/or harvest happens almost year-round in South America.

2. Because of South America’s vast crop production geography, it’s easy to misinterpret weather reports.

3. Most of Brazil’s second corn crop is exported and directly competes with the U.S. crop.

4. While average corn yields are lower in South America versus the U.S., they are steadily increasing.

In South America, soybeans are grown on a long north-south axis, which means they are planted and they mature at very different times. In the U.S., crops are grown more on an east-west axis where planting and maturing dates are more similar throughout the growing region.

“South America’s soybean planting window lasts nearly four months; in the U.S., it lasts about six weeks,” Scheve says. “Because of Brazil’s north-south axis, some fields in the southern part of the country could be planted on the same day fields in the north are harvested.”

When it comes to weather, the vast growing region in South America means there are areas experiencing drought while others deal with too much rain.

“Mato Grosso is probably the most important region to watch because it produces nearly 10% of the world’s soybeans, or the equivalent of Illinois and Iowa’s production combined,” Scheve explains.

The states of Parana and Rio Grande do Sul in southern Brazil are also important to watch, he adds. Combined, they are as key as Mato Grosso, but the two regions have different weather patterns. When Parana and Rio Grande do Sul are dry, Argentina, Paraguay and Uruguay are likely experiencing the same, which all told have double the growing acres as the entire U.S.

China Makes Largest US Soy Purchases in Months

Wed, 08 Nov 2023 21:53:19 GMT

China booked its largest single-day U.S. soybean purchases in at least three months on Tuesday, traders said, offering a glimmer of hope for the most valuable U.S. farm export after overseas sales of the 2023 harvest had fallen well behind the normal pace.

Chinese importers bought around 10 cargoes of soybeans, or about 600,000 metric tons, for shipment from Gulf Coast and Pacific Northwest export terminals between December and March, trade sources said.

The sales would be a relief to U.S. farmers, who have seen Brazil dominate the global export market for soy as well as corn for longer than normal this year.

If confirmed, Tuesday’s sales would be the largest single-day soybean purchases by the world’s top soy importer since late July, according to U.S. Department of Agriculture (USDA) daily sales data.

They were the latest in a series of soy import deals since late last week by Sinograin, China’s state-owned importer, according to three export traders with knowledge of the deals. Total purchases over that time were estimated at as much as 20 to 25 cargoes, two traders said.

Cash premiums for U.S. soybeans at Gulf Coast terminals jumped by as much as 10 cents a bushel on Tuesday as exporters scrambled to source supplies, traders said.

High U.S. prices due to barge shipping disruptions and stiff export market competition from Brazil, which harvested a record soy crop this year, have hampered U.S. sales in the season so far.

Confirmed sales to China as of late October were down 35% from a year ago, and sales to all destinations were down 28%. USDA is currently projecting a 12% year-on-year export decline.

But U.S. prices have become more competitive for shipments from December through March, when Brazil’s next harvest will be available.

USDA has confirmed private sales totaling 236,000 metric tons of U.S. soybeans over the past two days via the agency’s daily reporting system. Traders expect additional “flash sales” following the deals on Tuesday.

(Reporting by Karl Plume in Chicago; Editing by Marguerita Choy and Bill Berkrot)

Weather Uncertainty: A Marketing Plan Is A Must

Wed, 08 Nov 2023 17:37:24 GMT

I’ve always advised producers not to build a marketing plan on the weather forecast, but that doesn’t mean the weather outlook should be ignored.

The transition from La Niña to El Niño has already created dynamic market conditions. Drought in the western half of the Corn Belt in 2023 has the soybean market on edge ahead of the South American growing season. Heavy rains in southern Brazil with drier-than-normal conditions in the central and northern areas, where it is more production-intensive, are connected to the development of El Niño.

Following last year’s record Brazilian soybean crop, global soybean stocks are hefty. They’re not burdensome, but Brazil’s crops have been big enough to keep the globe well supplied. In the U.S., carryover supplies are tightening and are projected to be even tighter at the end of the current marketing year than in the past two years. Tight U.S. supplies, along with last year’s drought in Argentina, have kept U.S. soybean and soymeal prices at relatively elevated levels. If weather threatens Brazilian production at the end of this calendar year, look for strength in their soybean prices to light a fire in the U.S. market.

But if the weather supports another big Brazilian soybean crop, the 2023 lows around $11.50 in March soybean futures will likely be tested.

Importance of a Plan

Weather uncertainty is why you must stay active with a marketing plan. At $13 March soybean futures, the downside risk to the May low is just slightly more than the upside potential to the late-July high. Removing downside price risk via cash sales or hedges (long put options) is warranted and so is reopening upside price potential on bushels sold in the cash market with long call options.

The U.S. soybean market will be extremely sensitive to threats to the Brazilian soybean crop and will stand ready to add to 2023’s 83.6 million soybean acres. Most likely, there will be at least one weather scare during the Brazilian growing season. Continue to use rallies to increase old crop sales and start 2024 crop sales. A close above $13.50 in November 2024 soybean futures would signal global fundamentals have changed and would flip attitudes from “sell rallies” to “make the market prove it is done going up” before advancing sales.

Brazilian corn producers are also looking at a different scenario than they were at this time last year.

Last year, there was financial incentive to plant the safrinha corn crop. Safrinha corn looks to be breakeven this year.
Last year, the La Niña weather pattern encouraged growing a winter corn crop. This year’s El Niño has already delayed soybean plantings due to dry conditions in Mato Grosso and Mato Gross do Sul. Some growers have abandoned plans for a safrinha corn crop and instead will plant longer-season soybeans. CONAB (Brazil’s NASS) pegged a 9.5% drop in the Brazilian corn crop from year-ago in its first projection for the year.

Sell rallies in corn, but these El Niño-related issues could change attitudes in early 2024.

U.S. Farm Leaders Visit China, Talk Up Agriculture Trade

Fri, 03 Nov 2023 14:12:56 GMT

Dozens of U.S. agriculture industry representatives gathered in Beijing on Thursday to meet Chinese counterparts amid growing U.S. efforts to bolster farm trade even as political ties between their two countries remain strained.

A delegation from 11 groups, including the U.S. Soybean Export Council, U.S. Grains Council and U.S. Wheat Associates, is visiting a week after Chinese grain buyers signed non-binding agreements in Iowa to buy billions of dollars worth of produce, mostly soybeans, the first such signing since 2017.

This week’s visit, the likes of which had become rare due to bilateral tensions and three years of Chinese COVID-19 border controls, comes ahead of an expected meeting between President Xi Jinping and President Joe Biden in San Francisco this month.

“We’ve got a big complicated relationship, but agriculture is the ballast in the relationship,” Nicholas Burns, U.S. ambassador to China, told the gathering of U.S. and Chinese industry officials.

U.S. Grains Council officials visited China’s commerce ministry earlier on Thursday and raised China’s anti-dumping and anti-subsidy measures against U.S. imports of distillers dried grains (DDGS), a protein-rich byproduct from ethanol production that is fed to animals.

“They suggested we talk with the domestic industry here to have them give their support in the need of the product and they brought up the fact that they’d recently dropped the anti-dumping case on Australian barley, so whether that shows some hope for U.S. DDGs, possibly. I’m not sure,” said Cary Sifferath, vice president of the U.S. Grains Council.

Oilseeds and grains are the top U.S. export to China, accounting for $25.4 billion last year, far ahead of other goods such as semiconductors, but Brazil has been eating into the U.S. share of the Chinese market after harvesting bumper crops of soybeans and corn.

China has been pushing to diversify its import sources in the years since former U.S. President Donald Trump launched a bruising trade war and amid rising geopolitical risks, opening its market to Brazilian corn late last year.

Imports of Brazilian soybeans are up 18% in the first nine months of 2023 compared with the same period last year, compared with an 8% increase in U.S. arrivals. Almost 4 million tons of Brazilian corn has reached China, with more on the way.

The delegation, the industry’s largest to China since 2016, will travel to Shanghai for next week’s annual China International Import Expo, where USDA is hosting a pavilion for the first time since the event started in 2018.

(Reporting by Dominique Patton; Editing by Tony Munroe, Robert Birsel)

If China Is In a Recession What Does That Mean for U.S. Ag Exports?

Fri, 18 Aug 2023 20:24:01 GMT

China’s economic woes continue to mount. Not only has the stock market collapsed, but this week, China’s central bank unexpectedly cut key policy rates for the second time in three months, a fresh sign of urgency to support the struggling economy. This might already be spilling over to the U.S. commodity sector in the form of weaker export demand.

On Tuesday, the People’s Bank of China lowered the rate on medium-term lending facility loans 15 basis points. Plus, the yield differential between the China and U.S. benchmark 10-year government bonds widened to the most since February 2007, as investors speculated further easing of monetary policy and as China’s major state-owned banks were selling U.S. dollars to support their yuan.

Mark Schultz, Northstar Commodity, says: “China’s currency, I believe, is down to 16-year lows against the U.S. dollar. It’s all an attempt to try to spark better demand to come over and buy Chinese goods. And, of course, if China can then sell more of their goods, they would have cash and then they would probably start looking to buy more product.”

Mike Zuzulo, Global Commodity Analytics, adds: “You throw on top of that the 10-year yields we’re looking at right now going back up to the areas close to when we had the financial crisis in the Great Recession of 2008. The market is laser-focused on China and the negative side that’s going to spill over. There’s going to be a contagion.”

Firms are cutting China’s economic growth forecasts and Beijing’s official target of around 5% appears optimistic, which is already hurting demand for some U.S. products.

“They are probably in a real recession,” Zuzulo says. “They’re not near 5% growth. In my opinion, they’re probably barely at 2%, 2.5%. They really do need to stimulate, and that’s the heart and soul of why I think we’re dealing with 2019, 2020 levels and the corn and wheat prices right now. They don’t have the wheat and corn, they don’t have the support of the demand.”

Nearly $4 billion has been pulled out of the Chinese equities in August and there’s concern the collapse of their real estate bubble will cause financial contagion. Other economic news has been souring with industrial output slowing to just 3.7% annually, and retails sales are slow. China’s purchases of U.S. goods are down substantially in 2023, and their economic outlook will not help the situation.

Population Peak: How China’s Demographics Could Impact U.S. Agriculture

Tue, 25 Jul 2023 18:15:30 GMT

Home to 21% of the world’s population, China possesses only 7% of productive farmland. As such, shifts in the composition have effects that ripple across the globe.

In 2020, China’s population hit 1.41 billion, with an average annual growth rate of 0.053% since 2010 (the lowest 10-year growth rate since its first population census in 1953).

In addition, China’s population structure is changing, says Wendong Zhang, Iowa State University Extension economist. A growing share of residents are older than 65 and the birth rate is declining.

“With an aging population and a declining fertility rate, China’s population pattern increasingly resembles developed countries,” he says. “China population shift and income growth will increase demand for consumer-oriented products such as meat and vegetables, dairy and wine products versus bulk and intermediate products.”

Change in Demand

While the sheer size of China’s population drives the global economy, Zhang predicts these trends will slow the country’s food demand from key trade partners, such as the U.S.

China committed to purchases nearly $40 billion per year of U.S. agricultural products for the first two years (2020 and 2021) of the phase one agreement, which was signed on Jan. 15, 2020.

“Even though China has substantially increased their ag purchases they are still behind the very ambitious target of the phase one deal,” Zhang says. “The phase one deal left enough leeway to say purchases are contingent on market prices.”

Due in part to the COVID-19 pandemic and related impacts on global demand, China missed its commitment by about 30%, USDA says.

In 2020, U.S. agricultural exports to China totaled $26.4 billion, up $12.6 billion from 2019. China was the largest market for U.S. agricultural exports, a position it last held in 2016. Brazil (22% market share) and the United States (15%) were the top suppliers of agricultural goods to China, followed by the European Union with 14%.

During the online Top Producer Summit, Wendong Zhang will present “5 Transformations Happening in China That Will Affect Your Farm.” Register at TPSummit.com

Ukraine-Russia Tensions: What it Could Mean for Agriculture

Tue, 25 Jul 2023 17:32:16 GMT

The political tensions between Ukraine and Russia continue to mount. Russia has placed 100,000 troops on Ukraine’s borders, and the Pentagon ordered 8,500 troops on higher alert Monday to potentially deploy to Europe as part of a NATO “response force” amid growing concern that Russia could soon make a military move on Ukraine.

Ukraine is a key player in global agriculture, and how these conflicts play out will have international impacts. Ukraine has more than 41.5 million hectares (or 102.5 million acres) of agricultural land that cover 70% of the country.

In 2020, Ukraine’s agriculture sector generated approximately 9.3% of GDP. Crop farming, which accounts for 73% of agricultural output, dominates Ukrainian agriculture, according to the International Trade Administration .

The country’s main crops are sunflowers, corn, soybeans, wheat and barley. Globally, Ukraine ranks:

1st in global sunflower production (For 2021/22 Ukraine sunflower seed production is estimated at a record 17.5 MMT)
6th in global corn production. (For 2021/22 Ukraine corn production is estimated at a record 42 MMT)
6th in global barley production
7th in global rapeseed production
9th in global soybean production
9th in global wheat production

See what crops are produced where in Ukraine:

Ukraine has been a global supplier of wheat, corn and sunflower/sunoil, says Joseph W. Glauber, senior research fellow for the markets, trade and institutions division at the International Food Policy Research Institute.

This year, Ukraine is forecast to account for 12% of global wheat exports, 16% for corn, 18% for barley and 19% for rapeseed. The share of agriculture in export revenues for Ukraine increased from 26% in 2012 to 45% in 2020 amounting to $22.2 billion.

Most of the wheat gets shipped in the fall though they still export a little bit in the early winter, according to the Trade Data Monitor.

Corn exports start in the late fall after harvest and continues throughout the first half of the year.

Sunflowerseed oil is shipped most year-round though there is a little seasonal downturn in late summer as stocks of oilseeds are depleted awaiting the new harvest, Glauber says. In the mid-2000s, after implementation of export tariffs for unprocessed sunflower seed, Ukraine developed a leading sunflower oil industry and became the No. 1 exporter of sunflower oil in the world.

“So, any disruptions in trade would likely be more felt for corn and sunflowerseed oil than wheat, Glauber says. “Obviously, there would be major concerns if spring plantings were disrupted.”

Read More

Markets React As Tension Mounts Between Russia and Ukraine

AgriTalk’s Davis Michaelson hosted Vince Malanga, president of LaSalle Economics, on Tuesday, Jan. 25, to dive into the current events and potential market impacts.

5 Transformations Happening in China That Will Affect Your Farm

Tue, 25 Jul 2023 14:17:49 GMT

China contains the largest population of any country in the world. All those mouths drive demand across the globe and for your farm’s products.

“Chinese domestic policies have consequences for the global market,” says Wendong Zhang , Iowa State University Extension economist.

Zhang grew up in rural northeast China (his rural county was home to more than 1 million people and more than 100 million people across the globe share his last name). To set the stage for what farmers should know about China to understand the trade war, he provides a few key facts.

Mainland China and the continental U.S. are about the same size and cover similar latitude ranges.

The U.S. is home to 329 million people, while China is home to 1.4 billion.
The U.S. has around 17% of all the arable land in the world, with 4% of global population. China has nearly 20% of the population and 11% of the world’s arable land.

During the online Top Producer Summit, Wendong Zhang presented “5 Transformations Happening in China That Will Affect Your Farm.” Learn more here .

Zhang says farmers should understand these facts and trends about China.

Transformation 1: Exports to China Are Losing Steam

While the sheer size of China’s population drives the global economy, Zhang predicts these trends will slow the country’s food demand from key trade partners, such as the U.S.

“Exports to China are very consequential; they’re actually one of the key factors why we started seeing $5 and $6 corn since the fall of 2020,” Zhang says.

China committed to purchases nearly $40 billion per year of U.S. agricultural products for the first two years (2020 and 2021) of the phase one agreement , which was signed on Jan. 15, 2020.

“Even though China has substantially increased their ag purchases they are still behind the very ambitious target of the phase one deal,” Zhang says. “The phase one deal left enough leeway to say purchases are contingent on market prices.”

Due in part to the COVID-19 pandemic and related impacts on global demand, China missed its commitment by about 30%.

In 2020, U.S. agricultural exports to China totaled $26.4 billion, up $12.6 billion from 2019. In 2021, ag exports hit a record $33 billion — up 25% from 2020.

“A lot of people would only attribute this increase to the phase one deal,” Zhang says. “But the bigger force is related to the hog recovery and rebuilding following African swine fever in China. As they were rebuilding, they needed more feed grain. So, they bought record amounts of corn from the United States. They were also having protein gaps, so they bought a lot more pork and beef, especially in the latter half of 2020 and early 2021.”

Transformation 2: China is Diversifying Its Trading Partners

Even though China has increased its business with the U.S. in terms of ag goods, the country is also building more trade linkages with competitors of the U.S., Zhang says. One key way is through tariffs.

“The average tariff on U.S. products rose from 8% in 2018 to an average of 20% today,” he says. “Likewise, U.S. tariffs on Chinese products rose from 3% in 2018 to today’s 19%.”

But, at the same time, China actually lowered tariffs for competitors of the U.S. The average tariff for other countries decreased from 8% to 6%.

Zhang says China has also shown greater interest in expanding trade deals: “In a way this is China’s way of saying it embraces free trade.”

Transformation 3: China’s Population is Aging and Growing Richer

In 2020, China’s population hit 1.41 billion, with an average annual growth rate of 0.053% since 2010 (the lowest 10-year growth rate since its first population census in 1953).

In addition, China’s population structure is changing, Zhang says. A growing share of residents are older than 65 and the birth rate is declining.

“With an aging population and a declining fertility rate, China’s population pattern increasingly resembles developed countries,” he says. “China’s population shift and income growth will increase demand for consumer-oriented products such as meat and vegetables, dairy and wine products versus bulk and intermediate products. It’s the income, not necessarily the population, that really drives the quantity and the configuration of the exports.”

In addition, consumers in China are slowly trading up their protein choices. The transition from vegetable proteins to animal-based proteins is now including more beef , which is creating more demand and value for U.S. cattle.

“Chinese people eat on average less than 10 lb. per person per year,” Zhang says. “But when you have 1.4 billion in population, just 1 lb. more could still lead to a substantial increase in the global market.”

Transformation 4: The Focus on High-Speed Transportation

The Belt and Road Initiative was partially put on hold due to the pandemic, Zhang says. But China is still focused on creating a more efficient transportation system for the country and connecting it to its Asian neighbors.

Recently a high-speed railway was completed between Kunming and Loas. The project took around five years to complete, and it cut travel time from two days to three hours.

When Zhang left China in 2009 to attend college in the U.S., not a single mile of high-speed rail existed in country. Today China is home to15,500 miles of high-speed track — the largest high-speed railway in the world.

Zhang says China is also improving its trucking system with cold-chain technologies and equipment so they can transport meat versus live animals.

Transformation 5: U.S. and Chinese Politics Will be Key in 2022

This year China and the U.S. will hold midterm elections around the same time, Zhang says. President Xi Jinping will likely earn his third term.

“A lot of the analysts will say that it’s the president, Xi probably will be here for at least a decade, if not more,” Zhang says. “The room for collaboration probably become narrower because of the upcoming elections.”

Zhang points out Xi and President Biden had their first meeting (which was virtual) last November.

“Because U.S. and China relations are so important the first meeting typically happens within the first two or three months of when a new U.S. president in office — not almost a year later,” he says. “When you look broadly at the U.S. and Chinese political relationship, were probably expecting a bumpy relationship for the next decade.”

If you want to learn more about China, Zhang recommends these three books:

“The Beautiful Country and the Middle Kingdom” by John Pomfret
“China’s Economy” by Arthur R. Kroeber
“Invisible China: How the Urban-Rural Divide Threatens China’s Rise” by Scott Rozelle and Natalie Hell

Visit Iowa State University’s China Ag Center

Read More
Why China’s Taste for Beef Is Growing

Population Peak: How China’s Demographics Could Impact U.S. Agriculture

Eyes Wide Shut? US Agriculture Faces China Reckoning

While America Slept, China Stole the Farm

You can still register for the Online Top Producer Summit , which gives you access to content through March 31. Use the code “VIRTUAL” to take 50% off your registration fee.

Read more coverage of the Top Producer Summit .

5 Trends Happening In China That Will Affect Your Farm

Mon, 24 Jul 2023 20:51:24 GMT

China contains the largest population of any country in the world. All those mouths drive demand for your farm’s products.

“Chinese domestic policies have consequences for the global market,” says Wendong Zhang, Iowa State University Extension economist.

Zhang grew up in northeast China (his rural county was home to more than 1 million people and more than 100 million people share his last name). To set the stage for what farmers should know about China, he provides a few key facts:

Mainland China and the continental U.S. are about the same size and cover similar latitude ranges.
The U.S. is home to 329 million people, while China is home to 1.4 billion.
The U.S. has around 17% of all the arable land in the world, with 4% of global population. China has nearly 20% of the population and 11% of the world’s arable land.

EXPORTS TO CHINA ARE LOSING STEAM

CHINA IS DIVERSIFYING ITS TRADING PARTNERS

Even though China has increased its ag buying from the U.S., the country is building more trade linkages with competitors of the U.S., Zhang says.

While China has increased tariffs on U.S. products, it has lowered tariffs for other countries.

Zhang says China has shown greater interest in expanding trade deals: “In a way, this is China’s way of saying it embraces free trade.”

CHINA’S POPULATION IS AGING AND GROWING RICHER

In 2020, China’s population hit 1.41 billion, with an average annual growth rate of only 0.053% since 2010. China’s population structure is also changing.

“With an aging population and a declining fertility rate, China’s population pattern increasingly resembles developed countries,” Zhang says. “Its population shift and income growth will increase demand for consumer-oriented products. It‘s the income, not the population, that really drives the quantity and the configuration of the exports.”

CHINA IS FOCUSED ON HIGH-SPEED TRANSPORTATION

The Belt and Road Initiative was partially put on hold due to the pandemic, Zhang says. But China is still focused on creating a more efficient transportation system. For example, a high-speed railway was just completed between Kunming and Loas. It cut travel time from two days to three hours.

China is also improving its trucking system with cold-chain technologies and equipment so they can transport meat versus live animals.

China is winning the global race in high-speed rail thanks to large funding from the Chinese government in the past 15 years.

U.S. AND CHINESE POLITICS ARE KEY

Analysts predict President Xi Jinping to be in office for at least a decade, if not more, Zhang says.

Xi and President Joe Biden had their first virtual meeting last November. “The first meeting typically happens in the first few months of when a new U.S. president in office, not almost a year later,” he says. “We‘re probably expecting a bumpy relationship for the next decade.”

Watch Wendong Zhang’s 2022 Top Producer Summit online presentation: 5 Transformations Happening in China That Will Affect Your Farm

Read more coverage and other sessions from Top Producer Summit .

Brazil is Short on Bin Space As Grain Output Outpaces Storage Capacity

Thu, 20 Jul 2023 19:27:25 GMT

Brazil’s grain output dramatically outpaces storage capacity

The 2022/23 crop season could post two records in Brazil. First, it could produce a record 313 million tons of soybeans, corn, cotton, rice and wheat. Second, that record production would cause a record storage deficit of more than 100 million tons.

“Storage capacity growth since 2010 has not been proportional to increases in crop production in the same period,” says Joana Colussi, postdoctoral research associate at the University of Illinois.

Only 15% of Brazilian farms have warehouses or silos. In 2021, Brazil’s storage capacity could only contain 67% of its total grain production. In 2010, the ratio was 90%.

The grain storage deficit in Brazil is concentrated in the central-west states (Mato Grosso, Goiás, and Mato Grosso do Sul), which account for almost half of the national grain production.

“Although public and private credit is available for building warehouses, Brazilian producers still need to be convinced about the positive return on this type of investment,” Colussi says. “This situation can represent a risk for future Brazilian agriculture competitiveness.”

From the war in Ukraine to evolving Chinese demand to bumper crops in South America, the trends are shifting for global grain flow. What will the future hold? That will be the topic of a panel at Top Producer Summit.

Global Grain Shuffle: Is The End Of U.S. Grain Export Dominance Near?

Thu, 20 Jul 2023 18:45:25 GMT

It didn’t start with the swing of an ax in the Amazon or by an explosion in Kiev. While both of those contributed, the shift happening in global grain flows is a multifaceted prism through which the picture of the future of grain delivery is continuing to evolve.

“This year, Brazil could take the crown of being the world’s largest corn exporter,” said Dan Basse, president of AgResource Company . “It took that crown for soybeans back in 2017.”

Global Acre Increase

This feat was set in motion by the U.S. drought in 2012 as higher prices encouraged more acres and pushed buyers to seek alternative supplies. While Ukraine has helped to fill some of that demand, the ongoing war and consequential infrastructure damage will make it hard for Ukraine to reclaim former volumes for some time.

“Ukraine, no matter what happens with the war from here forward, optimistically we’ll probably see corn and sunflower production 40% to 50% below normal,” Basse says. “The corn crop will probably be in the range of 18 million metric tons (MMT) or 20 MMT.”
Of course, that’s only possible if the negotiated shipping corridor remains open and transport vessels are willing to haul grain to its destination.

“It’s exceedingly unlikely Russia will pull out of this agreement simply because their allies, China, India and Iran, have a strong interest in keeping feed grains flowing,” says Matt Roberts, senior grain analyst with Terrain .

All Eyes on Wheat

As Ukraine’s production sputters amid war, labor shortages, high fertilizer prices and diesel near $30 per gallon, other countries will help make up the shortfall. Wheat will come from the EU, Argentina, the U.S. and Russia.

“The Russian wheat crop is a record over 100 MMT, and they’ll be exporting wheat at a cheaper price than us,” says Steve Freed, vice president of grain research at ADM Investor Services .

“If Russia has a crop problem, there will be a story in the world wheat market,” Basse adds.

Expanding acreage beyond U.S. borders, Freed and Basse agree, will continue to drive up supplies and drive down U.S. export demand.

“We think Russia could easily add 18 million acres for next year and Brazil could also add 18 million acres next year and not really affect the Amazon,” Freed says. “While environmentalists in Washington wants to add 3 to 4 million acres to the CRP.”

Soybean Spotlight

The juxtaposition of potential acreage contraction leveled against a new demand driver in renewable diesel and sustainable aviation fuel has expanding crush plants searching for more soybean acres, not less.

“The Renewable Volume Obligation (RVO) RVO came down from EPA in December and so we now think we’ll need somewhere between 14 million or 15 million additional soybean acres by 2026,” Basse says. “As we look at the last half of the year, we think soybean oil will make new all-time highs.”

As soybean oil prices and demand drives higher, Basse expects it to impact planting decisions in 2024. The result will be a burgeoning domestic market for soybeans and big exportable supplies of soybean meal.

“As renewable diesel comes online, our share in world soybean trade is declining,” Basse says. “This year, our share is only about 11% and when I first got in this business 44 years ago it was 64%.”

Freed agrees, expecting the trend to be lower U.S. grain exports due to a record crop in Brazil. That big potential matches the big demand from the world’s No. 1 soybean buyer, China. Roberts says we’ll still sell China soybeans, it will just come in the form of livestock protein.

“As China, India, Indonesia and other developing countries become wealthier it’s not just about eating more,” said Roberts. “It’s about eating better and that means moving up to better cuts of meat and animal protein.”

These analysts predict, the only constant in today’s global grain flow picture is change.

“The 2022 rally was all about lower supplies,” Freed says. “2023 is going to be about lower demand as prices try to compete with the fact that all these other origins are now cheaper than us.”

Argentina Soybean Crop Smallest in 25 Years Due to Historic Drought

Mon, 24 Apr 2023 21:38:24 GMT

A historic drought has severely cut the size of this year’s crop in Argentina, especially soybeans, and there are other headwinds for agriculture, including runaway inflation, an export tax and deflation of their currency, the peso, at play.

The market has been watching Argentina’s crop shrink throughout the growing season, which has supported U.S. prices, especially soybean meal. The Buenos Aires Grain Exchange pegs corn production at 36 million tons and it just lowered the soybean crop estimate another 1.5 million to 22.5 million metric tons.

The cut came as harvest has progressed and yields have been coming in even lower than expected. Market analysts there believe the final crop will be even lower than current estimates and less than half of normal. This makes it one of the smallest crops in nearly 25 years.

Sol Arcidiacono, head of the Latin American Grain Desk with Hedge Point Global Markets, says: “We are going to have a cut in production of 50% considering when we were seeding last November December. I think we’re going to be close to 20 million tons. This is really low. I have been in this industry for 20 years and I have never seen such a small crop.”

She says this will result in the No. 1 soybean meal exporting country in the world having to import around 10 million metric tons of soybeans just to keep their processors in business.

“It is going to be a challenging this year.” Arcidiacono says. “Argentina has crushing capacity of 60 million tons, and we are going to have a crop of almost 22 to 23. There’s going to be a big gap we will have to try to fill with imports.”

At the same time, the ag businesses and farmers in Argentina are also facing some of the highest inflation in history at more than 100%. This is why farmers there have been reluctant to sell their soybeans because they are holding the crop as a hedge against inflation.

As a result, the Argentina government instituted a soy peso program or preferential exchange rate to boost soybean exports. The first program in September generated around 7 million tons of soybean sales in a month, while farmers have only sold 1 million this round. The program lasts until May 31.

What's Behind China's 83 MB Corn-Buying Spree and Will the U.S. See More Business?

Mon, 20 Mar 2023 19:32:12 GMT

China has been on a corn-buying spree recently. The business is welcome with U.S. corn exports running behind last year’s pace by nearly 40%. So why is China back in the market, and how much more will they purchase?

China was largely absent in the U.S. corn export market last year after record purchases of 846 million bushels in the 2020-2021 marketing year. However, there were rumors the past few weeks that China might be in the market for corn, and it was finally confirmed with last week’s flash sales. Market experts say China needs the corn as the country reopens after COVID and demand picks up. U.S. corn is also cheaper as China’s corn price is nearly $10.50 a bushel.

U.S. corn has dropped to a price level that is competitive globally, below Ukraine and Brazil, which is running out of corn supplies. This is attractive to Chinese end users who are shrewd buyers.

Darin Newsom, senior market analyst with Barchart, says: “That 75-cent sell off in the futures, even with basis staying strong, is going to be an attractive buying opportunity to both domestic merchandisers and Chinese end users who absolutely jumped in on the market at that point.”

There’s also concerns about the smaller crop in Argentina due to drought and wet weather delaying planting in Brazil. Market analyst Naomi Blohm of Total Farm Marketing says a percentage of the Safrina corn crop is going in the ground after the ideal agronomic window.

“That’s significant for the South American crop because it’s more at risk to be in that hot and dry spell that always happens at a later time of year for the second crop corn, as well as the potentially early frost,” Blohm says.

That might also mean China is not done buying U.S. corn as it will be three or four months until Brazil’s second corn crop is ready to be harvested.

“We know we’re the cheapest corn in the world and even though geopolitical strains are present between the U.S. and China I think they’re building their reserve back or they’re just getting some stuff on the books,” says Darren Frye with Water Street Solutions.

They could also be concerned about a delayed planting season in the U.S. with the northern snowpack and wet conditions in the eastern Corn Belt, Frye adds.

With competitive corn prices China might not be the only buyer of U.S. corn. Market experts say USDA will need to raise its corn export projections in the next WASDE report.

4 Macro Factors Impacting the Agricultural Economy

Fri, 10 Feb 2023 14:18:21 GMT

What is the state of the U.S. economy? What is the threat of a recession? How will these macro factors impact the agricultural economy?
Your farm is being impacted by a myriad of macro and micro economic risks. Kanlaya Barr, director of corporate economics at John Deere, provides a guide to a few risks you should monitor in the next year.

1. Recession Probability

For the next 12 months, the probability the U. S. economy will fall into a recession is about 60%, Barr says.

“But even if we are in a recession, it is likely to be different than the last recession we saw,” she says. “It’s like going to be more mild, more shallow and also short-lived. We’re likely to see some recovery in 2024. So, it’s definitely not a repeat of what we saw in the great financial crisis in 2009.”

This map shows the relationship of U.S. GDP and recessionary periods (shaded areas indicate U.S. recessions).

2. Employment Rebound

The COVID-19 pandemic reshuffled the labor force, Barr says. Overall, the labor participation rate in the U.S. is lower than before the pandemic.

“So, now we have companies that want more labor, but we still have about 2 million people still on the sidelines,” she says.

Currently, there are 1.7 jobs for every worker looking for a job.

On the flip side, those companies that can are hiring as many people as they can. Barr says that is known as labor hoarding, where companies add extra people to their teams as a hedge against losing employees.

The tight labor market should help reduce the recession impact, Barr says.

“The last time we were in a recession it took about six years for the labor market to recover in unemployment,” she says. “This year, if we run into that situation, I think it’ll be short-lived.”

3. Lower Supply Chain Pressure

After three years of supply chain backups and frustrations, that picture is finally starting to improve. Barr reports the global supply chain pressure index is better now than in the last two years.

“We expect that to continue to see improvement,” she says.

4. Tight Global Commodity Stocks

Overall, Barr says agriculture is an economic bright stock.

“Despite all the economic slowdowns, demand for crops is still growing,” she says. “On the supply side, just the past few years we have seen quite a bit of crop loss in many parts of the world. So that keeps stocks pretty tight. Therefore, with demand still holding supplies are still uncomfortably tight. So, I think that’s going to be a sign that we’re going to see some of these prices continue to be elevated.”

Barr spoke at the 2023 Top Producer Summit in Nashville. Listen to her conversation with Andrew McCrea on the Farming the Countryside podcast:

View from the Top: John Deere Economist Kanlaya Barr

Future Shock: U.S. Agriculture Sleeping on China’s Historic Population Crash

Wed, 18 Jan 2023 21:07:15 GMT

American agriculture silently is watching the greatest disappearing act in world history. China, the biggest food importer on the planet, is entering the real-time throes of a potentially devastating population crash and the effect could be immense for U.S. farmers.

China has broken every branch on its family tree without need of war, cataclysm, or disease via 40 years of adherence to a self-imposed one-child policy. According to multiple estimates, China’s populace may dwindle from the current 1.3-1.4 billion to 1 billion by 2050 and a near unthinkable 494 million by 2100.

If China’s population is halved or diminished by a significant portion, the repercussions on U.S. agriculture exports could be massive. “This is going to happen—and happen faster than most people think; it’s happening right now,” says Todd Thurman, international swine management consultant and owner of SwineTex Consulting Services. “China’s population decline is not theoretical or even controversial—it’s only a question about the time frame and the degree of loss.”

American ag is asleep at the wheel, Thurman contends. “China—our biggest ag commodity buyer at present and the biggest in history—is on track for a population collapse like nothing the planet has ever seen, but hardly anyone in U.S. agriculture is taking notice.”

What happens if graying China, possibly the fastest aging country on the globe, needs more coffins than cradles, and declines by half in number? Answer: U.S. agriculture loses a hefty portion of its juggernaut customer base—not to a bang, but a whimper.

Good, Bad, or Ugly

Every day, China must feed 20% of global population. China is not only the world’s biggest consumer of agriculture goods—it is the biggest in history.

In 2020, the Chinese Communist Party (CCP) bought $193.5 billion in agriculture imports, including $26 billion from the U.S., making China the No. 1 buyer of goods from American farmers. In 2021, China’s ag imports increased, according to USDA/FAS’ 2021 Export Yearbook : “U.S. agricultural exports to China totaled $33 billion, up 25 percent from 2020. China was the largest market for U.S. agricultural exports and the largest food import market in the world. While Brazil remained the top supplier of agricultural goods to China with 22% market share, the United States was able to expand its market share from 14% in 2020 to 18% in 2021…”

What commodities are most coveted by China? In 2021, soybeans were king, valued at $14.1 billion as the No. 1 U.S. ag commodity sold to China. Corn ($5.1B), sorghum ($1.8B), pork ($1.7B), beef ($1.6B), cotton ($1.3B), tree nuts ($978M), poultry ($879M), wheat ($803M), and dairy ($703M) rounded out the top 10 U.S. ag commodities imported by China.

Good, bad, or ugly, China plays a colossal role in American agriculture. “It’s shocking,” says Thurman . “China’s role in our exports is a stunner.”

“Look at our top 10 ag exports in 2021,” he continues, “China is the No.1 destination for all of the top five commodity classes. They are No. 1 in six of the top 10 commodities, and in the four classes where they aren’t No. 1, they are still No. 2 or No. 3. It’s hard to understate how dependent we’ve become on China in terms of ag exports.”

“If something significant happens to China’s population ,” Thurman adds, “and it will one way or another, the effect will be felt by almost every corner of U.S. agriculture.”

Close the Kindergartens

In 1970s, China sold the permanent on the altar of the temporary.

Nearing the 1-billion citizen benchmark in 1979 (China surpassed 1 billion in 1981), and convinced overpopulation would be its downfall, the CCP went ultra-draconian, reacting to surging population numbers by mandating a nationwide one-child policy. Backed by forced abortions , sex-selective abortions, sterilizations, and harsh fines, China prevented at least 400 million births, according to The People’s Daily , a CCP-controlled publication.

A 2.1 fertility rate is required to maintain a stable populace for any country. Two children replace two parents (along with a slight .1 bump to account for deaths during infancy or childhood). When two become one, demography is turned on its head—the kindergartens shutter. By imposing a one-child diktat across an almost 40-year stretch, China decimated its future population growth.

In tandem with population loss, China quickly is going gray. By 2030, 360 million Chinese—a quarter of the country and more people than the entire citizenry of the U.S.—will be older than 60. In 1978, prior to the one-child policy, China’s median age was 21.5. In 2021, the median age was 38.4, and by 2050, the median age could be over 50.

In 2016, aware of the lead balloon set to drop, the CCP announced a two-child policy. No gain. Five years later, in 2016, the CCP again tried to reverse population decline by jumpstarting a three-child policy. No gain. China’s 1.3 birthrate since 2020 is too little, too late.

Even if China experienced a massive baby boom (unlikely as all relevant trends point the other direction), the population will still decline in the near to medium term. The population die is cast.

Crash in the Cards

Plainly stated, China can’t unring the demographic bell. The UN’s World Population Prospects 2022 ( WPP ) report predicts India will overtake China in 2023 as the most populous nation. Further, the WPP report contains dismal population prospects for China by 2100. Best outlook, China drops by 20%. Base outlook, China drops by less than 50%—771 million. And worst outlook? China declines by over 60% to 494 million.

“In just 80 years, the UN estimates there will be 1.14 billion to 494 million Chinese,” Thurman details. “The UN projects a decline between 200 million to 1 billion. The more I dig in, the more I think the decline will be closer to a worst-case scenario. U.S. agriculture needs to think about what a shocking global export issue this could be. In simple terms, it means two-thirds of your top customer leaves the building.”

Adding layers to the cake, China’s true population numbers could be more alarming than UN projections. In 2007, Yi Fuxian , a scientist at the University of Wisconsin, published Big Country with an Empty Nest (banned by the CCP), accusing the CCP of playing hide-and-seek with demographic data, and presciently predicting China’s population would begin a slide in 2017—not in 2033-34, as stated by the UN.

In July 2022, the demographic records of 1 billion-plus citizens leaked in China, resulting in an online hacker release of a small portion of the data. Fuxian analyzed the numbers and sounded the alarm:

“It suggests that post-1990 births continued to decline faster than I had predicted, and in fact did not peak in 2004 or 2011. That means China’s real population is not 1.41 billion (the official figure) and could be even smaller than my own estimate of 1.28 billion. It also means that China’s economic, social, foreign, and defense policies—as well as those of the United States and other countries toward China—are based on erroneous demographic data.” (emphasis added)

Echoing Fuxian and speaking at the 54th Annual ECC PerspECCtive Conference in 2022, geopolitical strategist and author of The End of the World is Just the Beginning: Mapping the Collapse of Globalization , Peter Zeihan, says China is on track for a seismic reckoning.

“The Chinese have been updating their data in the last couple of years. They still haven’t released their 2020 census because they couldn’t believe what came back,” Ziehan noted. “They’re now starting to believe it and they now think they overcounted their population in excess of 100 million people, all of whom were born since the one-child policy was adopted … If this is true, China is the fastest aging society in human history. That means from a demographic point of view, the Chinese economic model cannot survive the decade. And it strongly suggests that as soon as 2050, the Chinese may have lost 600 million people.”

Despite possible upheaval for the world’s No. 1 importer of food, U.S. agriculture is not paying attention, Thurman says. He points to a trio of baselines for American farming to consider: “There are three factors that are not contentious or disputed. One, China’s population is going to be smaller in 2100 than it is now. Two, China’s population has either peaked, is peaking, or will soon peak. Three, China’s population is aging at the fastest rate in human history and they can’t stop the slide.”

A crash is in the cards.

Prison of the Present

As with any business, agriculture often is blinded by the glare of the moment, i.e., China is the eternal export darling. However, a quick peak backward is a reasonable look forward. Rewinding the clock in 20-year increments reveals the top importers of U.S. ag commodities in steady flux, with Japan dominating the No. 1 slot from roughly 1960 to 2000.

Therefore, who will be the belle of the ag export ball in 2040? 2060? 2080? “To say that our list of major export customers is not going to shift around should not be controversial, because that perspective matches history—and reality,” Thurman says. “We get blinded by the fallacy of the present. If you think things won’t be completely different 30 years in the future, go back 30 years in past.”

The entire structure of modern agriculture, head to toe, is built on a tacit assumption: Tomorrow’s population will be bigger than today’s population. The assumption has held true—until now. The family tree is shrinking in almost every corner of the globe, with Africa as the exception.

Africa is the sole region projected to have robust population growth over the next 30 to 70 years, according to Pew Research Center . Up from its present 1.5 billion, Africa’s population is expected reach 4-plus billion by 2100, including five of the 10 most populous nations: Nigeria, D.R. Congo, Ethiopia, Tanzania, Egypt.

“At a minimum, the contrasting directions of China and Africa tell us there’s a significant shift coming in global ag and food markets,” Thurman notes. “We’re going to see a major market move from East Asia to Sub-Saharan Africa, but if we’re flippant, someone will beat us to the punch. You can’t turn your export boats to other countries on a dime. The global population is expected to peak around mid-century so exporters will have to find demand in a declining global market. The competition will be intense.”

Benchmarks on the horizon often are ignored simply because of distance, but such a perspective is costly for agriculture, Thurman insists. “It’s concerning to me that we are decades away from a population trend impact and we not only have no plan—we aren’t even having a conversation.”

“I’m an optimist and I’m confident in the U.S. ability to deal with change. But there is a problem if we can’t recognize change. At the absolute least, I want to raise awareness and get people talking about what this demographic and export change will look like.”

Thurman does not pull his punches. The China stakes, he insists, are mammoth. “There is no precedent. There is no historical reference point for the slow fade of an incredibly large number of people. The U.S. agriculture export industry should consider the ramifications now because change is already baked in the pie and the sooner we recognize it, the sooner we can develop strategies for the new reality and the less painful those adjustments will be.”

To read more stories from Chris Bennett (cbennett@farmjournal.com 662-592-1106) see:

Young Farmer uses YouTube and Video Games to Buy $1.8M Land

Cottonmouth Farmer: The Insane Tale of a Buck-Wild Scheme to Corner the Snake Venom Market

Tractorcade: How an Epic Convoy and Legendary Farmer Army Shook Washington, D.C.

Bagging the Tomato King: The Insane Hunt for Agriculture’s Wildest Con Man

While America Slept, China Stole the Farm

Bizarre Mystery of Mummified Coon Dog Solved After 40 Years

The Arrowhead whisperer: Stunning Indian Artifact Collection Found on Farmland

Where’s the Beef: Con Artist Turns Texas Cattle Industry Into $100M Playground

Fleecing the Farm: How a Fake Crop Fueled a Bizarre $25 Million Ag Scam

Skeleton In the Walls: Mysterious Arkansas Farmhouse Hides Civil War History

US Farming Loses the King of Combines

Ghost in the House: A Forgotten American Farming Tragedy

Rat Hunting with the Dogs of War, Farming’s Greatest Show on Legs

Evil Grain: The Wild Tale of History’s Biggest Crop Insurance Scam

Signs Growing that the Global Supply Chain Crisis is Over

Fri, 23 Dec 2022 18:32:27 GMT

From the docks of Southern California and Europe to the parcel hubs in the Midwest and the store shelves in New York, signs are growing that the global supply-chain crisis is over, according to the Wall Street Journal (WSJ).

The COVID-19 pandemic that spawned product shortages, shipping bottlenecks and soaring transport costs may not be gone, but the WSJ reports goods are moving around the world again, reaching companies and consumers.

Despite widespread government and industry attempts to unwind the bottlenecks, the real break may have come in the demand slowdown that has eased the pressure on strained operations.

“As some of commodity prices and transportation costs begin to come down, we’re revisiting these costs with our suppliers,” says Bill Bolts of Lowe’s, on easing supply chain pressures.

On the Water

According to Drewry Shipping Consultants’ index for spot prices, to ship a 40-ft. container from Shanghai to Los Angeles the week of Dec. 22 was $1,992, down from $2,000 the week before and 82.2% below the 2022 high set in Jan.

U.S. container imports reached their lowest level in November since early 2020, and shipping heavyweight Maersk Line projects demand will decline next year from 2% to 4%. Freight rates that busted shipper budgets last year are sliding and broader costs for suppliers heading into 2023 are also retreating.

China COVID Policy News Continues to Change Amid Slowing Imports

Tue, 08 Nov 2022 21:24:04 GMT

China’s economy has been slowing the past several months due to continued COVID lockdowns. It’s hit their housing and manufacturing sectors, which has slowed their GDP. However, since the Chinese election, stories have been flip flopping on a possible change in policy. Reports circulated last week China was possibly easing it’s zero-tolerance policy on COVID and markets such as cotton, soybeans and energies rallied on the news. This comes at the same time China’s import data for October shows lockdowns are taking their toll on demand for ag goods.

As of Tuesday, Chinese officials say they will make no change until 70% of the population is vaccinated. Over the weekend, they reiterated they will persevere with a “dynamic-clearing” approach to Covid-19 cases as soon as they emerge. This refutes last week’s comments that Beijing was making “substantial” policy changes in the coming months.

Shawn Hackett, Hackett Financial Advisors, says the trade is looking for market signals to determine what is really happening with the Chinese currency.

“I think if this is a real story the capital flows will start going back into China, back into the country, thinking things are going to get better economically, he says. “I’d be looking at that 14 area on the Chinese currency.”

October import data for China shows a decline of 0.7% versus a year ago, the first drop since August 2020 as domestic demand slumped amid strict Covid restrictions. China’s exports fell 0.3% leaving a trade surplus of $85 billion, shy of an expected increase of $96 billion. Hackett says this should be no surprise.

“You lock people in their rooms, they’re not allowed out, and you hand them food twice a day. No matter how you want to slice and dice, it that hurts demand without question,” Hackett says.

China imported just 4 million metric tons of soybeans in October, plunging 46% from September and the lowest for any month since October 2014. For the first 10 months of 2022, China soybean imports are down 7.4% versus last year. China’s October meat imports are also down 5% from last year, mostly due to a drop in pork. Through the first 10 months of the year, meat imports are down 25% verses 2021. Hackett says these could rebound quickly if China reopens its economy.

Everything’s Bigger in Brazil: The Country Is Poised To Set A Grain Production Record

Tue, 08 Nov 2022 18:52:24 GMT

Brazil has more arable land than any other country in the world. It’s also a top-five producer of 34 agricultural commodities, per USDA. As Brazilian farmers start to plant this fall, forecasts show the 2022/23 crop harvest could be the largest ever.

For the upcoming crop season, CONAB, the country’s statistics agency, forecasts Brazilian production will top 312 million tons of soybeans, corn, cotton, rice and wheat. That is 15% higher than last season, when Brazilian farmers harvested an all-time high of 271.4 million tons of grains.

“There’s no reason not to expect the same trend of higher production in the future,” says Gary Schnitkey, Universi-ty of Illinois Extension agricultural economist.

PROFITS PUSH ACRES

Several factors are behind the increase. “High prices and profits last season, coupled with the depreciation of the Brazilian currency relative to the U.S. dollar, have motivated farmers to increase acres,” says Joana Colussi, academic researcher at the University of Illinois.

Similar to U.S. farmers, Brazilian farmers are facing higher input costs. For soybeans, some farmers are seeing a 40% to 50% increase from last year, says Daniele Siqueira, grains market analyst for AgRural, a Brazilian agricultural consultancy. For corn, costs are up around 30%.

While the threat of another La Niña and its devastating impact on crop yields is a concern, Siqueira says farmers will continue to plant and hope for the best.

Instead, their biggest concern is the Oct. 30 presidential election. “Most farmers are supporters of President Bolso-naro and are afraid his leftist opponent, former president Luiz Inácio Lula da Silva, might win,” she says. “Farmers believe Lula could take measures that would weigh on their profitability, such as export taxes and export quotas, ‘turning Brazil into Argentina’, as they say. They also fear a nervous economic environment, with foreign investors afraid of putting money in Brazil.”

Beyond politics, Brazilian farmers are worried about slow demand for soybeans from China, Siqueira says. In 2021, China was the top importer from Brazil of soybeans, cotton, sugar, beef, pork and chicken.

Head to Head: Supply Necessities

Wed, 05 Oct 2022 18:44:12 GMT

Q:

Corn and soybeans have different domestic supply stories; meanwhile, there does not seem to be a global shortage of either. What will it take to assure adequate supplies of domestic soybeans? On the other hand, what needs to occur in order to build demand for expected burdensome U.S. corn supplies?

Prices Will Help Supply Self-sort

Dale Durchholz
Senior Market Analyst, AgriVisor, LLC

The shift in the price relationship between corn and soybeans will go a long way to resolving issues for both. The persistence
of high soybean prices will curtail demand while promoting expansion in South America.

Typically, when the price ratio between soybean meal and corn reaches more than 3:1, demand diminishes. Today, it’s 2.65:1.

High soybean prices and a relatively weak Brazilian real have kept Brazilian prices near historical highs. The net effect of high soybean prices and moderate corn prices is prompting an acreage shift to soybeans. Recent estimates suggest plantings could rise as much as 5%. In Argentina, prices coupled with government trade policies are expected to shift more acres to soybeans.

With average yields, those two countries, along with Paraguay and Uruguay, could produce more than 5.7 billion bushels. Brazil will likely plant early, meaning their supply will enter the world pipeline early and diminish export demand sooner than last year.

Corn’s low prices will accomplish two things—stimulate demand and discourage planting in South America. The combination could cause corn exports to be the strongest toward the end of the marketing year, potentially lifting corn prices.

Rapid Grain Growth Not Needed

Dan Basse
President, AgResource Company

The world is back to needing just a 1.8% growth in grain production to satisfy rising caloric demand. The markets are where they were in the mid 2000s. We need weaker prices to stimulate new demand growth.

The U.S. will likely produce a 2013 corn crop near 14 billion bushels, which is being achieved with yields below trend. The 2013 soybean crop was curtailed by weather, and the total crop will be near last year’s drought-reduced harvest at 3.1 billion bushels.

The world will not endure a shortage. Demand rationing in the U.S. will not be accomplished by futures, but by basis and spreads. This is similar to the just-ended 2012/13 crop year. With normal weather, it will take lower prices and considerable time for the U.S. to return as a key grain exporter and compete with Ukraine and Brazil.

AgResource does not expect the world grain markets to bottom for another several years (with normal weather). And the U.S. soybean shortage this year will be temporary with world producers expanding their oilseed production in the growing cycles ahead.

The U.S. is becoming the residual supplier to world importers. Only low prices for a considerable amount of time can rebuild U.S. demand and start the next bull cycle.

USMEF Celebrates Export Relationship with Japan: Looks Ahead to Next 45 Years of Growth

Tue, 27 Sep 2022 19:20:00 GMT

Leaders of the U.S. Meat Export Federation traveled to Tokyo last week to mark the 45th anniversary of their Japan office.

Japan is consistently a top export customer for U.S. beef and pork both by value and volume. That relationship expanded under the U.S. Japan Trade Agreement, which led to meaningful tariff reductions and has greatly increased the value of each beef and pork carcass.

The U.S. has had tremendous success in Japan the past 45 years, but is now looking ahead to the next 45 years and how to further expand this red meat export market, according to USMEF Chairman Mark Swanson, who is also founder of Tru Grit KGMS Enterprises in Fort Collins, Colo.

“We’ve had the wonderful opportunity to visit some retail outlets, see the U.S. product on display in the supermarket chains and learn from our importing customers about the value they see in our product and how we might be able to continue to grow the demand for exports in the market,” Swanson says.

The 45-year relationship has built a loyalty for U.S. red meat in Japan, says Dan Halstrom, USMEF president and CEO.

“It’s not easy to get started in Japan. But once you do, and once you supply what you say you’re going to supply in terms of quality and consistency, the market is very loyal to our supply sources,” he says. “That’s one of the big takeaways, markets go up and down in price, but the Japanese market is always here buying on a consistent basis.”

The Japan market is also highly competitive, and it’s the relationship U.S. farmers have that gives them an advantage, says Dean Meyer, USMEF chair-elect and a livestock and grain producer from Rock Rapids, Iowa.

“There are 20 or 25 countries that want shelf space here, but what differentiates U.S. meat from meat around the world is that it’s safe, reliable and tasty,” he says. “What we’re really pushing now with the campaign is it’s raised on family farms.”

Mayer says that messaging has really attracted the attention of consumers in Japan, and it’s a success they plan to capitalize on.

In 2021, Japan was the second largest importer of U.S. beef by value at nearly $2.4 billion but the top customer by volume at 320 million metric tons. Japan was the third largest U.S. export customer for pork by volume and value at almost $1.7 billion.