2021 Corn Exports To China Set To Crush Expected Target By 1,000%, Phase One Finale In Focus Nov 15, 2021

USDA’s latest crop projections threw a bit of a shock into the soybean market. The November Crop Production Report came with change to both projected soybean and corn yields, as well as production.

According to USDA, U.S. farmers are expected to produce 15.1 billion bushels of corn this year, which is a 43-million bushel boost from October. That’s based on a national average yield that’s expected to set a new record of 177 bu. per acre. Considering the drought that plagued production in states like North Dakota, South Dakota and Minnesota, Ohio State University ag economist Seungki Lee says the yields are a testament to crop genetics at work in fields today.

“The overall production outcome is quite large still,” says Lee. “The corn production is over 15 billion bushels, which is a record high and the nationwide corn average corn is also record high at about 177 bushels per acre.”

The soybean crop projection was cut 23 million bushels due to lower yields. USDA projects the national soybean yield to hit 51.2 bu. per acre, a slight reduction from the October report. And while USDA’s reduction did fuel the soybean market, he says soybean yields also showed resilience in the midst of drought.

“Overall, apparently farmers did pretty well this year, even though they had gone through pretty tough weather challenges this year,” he adds.

China and U.S. Relations in the Spotlight

Monday, President Biden and China’s Xi Jinping are scheduled to meet, with the White House saying the two countries will hold a virtual summit. Prior to Monday’s meeting, the White House seemed to try to set low expectations for the video call between the leaders, with the White House saying no major announcement is expected.

The talks are occurring as the Phase One trade agreement between the two major world economic powerhouses is also coming to a close. The commitments made by China officially started in January 2020 and run through December 31, 2021. Ohio State’s Ian Sheldon focuses on policy and trade. He says while China isn’t buying at the same pace of last year, it’s important to note that China is still the top buyer for U.S. agriculture.

“China is still forecast to be our largest export market this year,” Sheldon told U.S. Farm Report. “So, the ranking is China, Canada, and then Mexico, which is exactly what you'd expect here in North America with the U.S. Mexico Canada Agreement (USMCA) and just the fact that we're close by geographically. But China is forecast to be our largest export market.”

While soybean sales have created doubts on just how much China will end up sourcing over the next year, Sheldon says to date, overall agricultural exports destined for China look to miss the mark. But there are bright spots in the overall story.

"In terms of agricultural exports, it looks like for 2021, we're going to hit about 84% of the commitments that China made to import. So, a lot of that is going to be dependent as we go out through the end of the marketing year, and particularly how much corn and soybeans are exported to China.”

However, it's commodities like corn, cotton, wheat and cotton that seem to be driving the boost in China's appetite in 2021.

“If you look at exports to China across commodities, soybeans are not hitting the target that they were expected to hit. Then, corn is way over target, we're talking about 1,000% higher than where it was expected to be, along with our pork exports that have been very strong to China, as well as our wheat exports and our cotton exports. So, you have to sort of look at it in the aggregate and by commodities, as well.”