The USDA Crop Progress Report for the week ending May 19 brought some relief over the status of the U.S. corn planting pace and its potential impact on yield. The prior week’s release indicated U.S. corn producers had about half the crop in the ground, or 5 points behind average.

Soybean progress on May 12 stood at 35%, 1 point ahead of average. Yesterday’s release saw active planting in several key producing states, raising the nationwide corn progress to 70%, just 1 above average. For example:

Soybeans continued to gain versus average at 52% complete, 4 points ahead of the 5-year pace.

Another significant factor in crop progress is the weather. Most in the market are aware of several recent University of Illinois studies which have concluded that low levels of late planting (below the average pace) are associated with approximately a 0.35 bpa reduction in yield versus trend.

With a 181.0 bpa USDA yield assumption, the current impact of that historic trend is around 3½ bpa below trend, giving us a 177.5 working number for yield expectation. The takeaway here would seem to be more rapid weekly progress over time, weather cooperating, which could reduce the likelihood of a major yield impact.

For example, from 2000 through 2004, producers planted an average of 12.8% of the crop from May 13 to 19. That pace incrementally improved to 15.75% for 2020-2023 and jumped to 21% this year. But, of course, the market still has to deal with weather in July and August.

On Brazil: Conab versus USDA

Our other concern for this growing season is the current and rather large differences between Conab and the USDA for Brazil's corn and soybean production estimates. The graphs below highlight the differences since 2010/2011. For both crops, differences in the respective estimates have increased sharply in the past 3 years, as indicated by orange vertical bars for soybeans and green bars for corn.

It almost goes without saying that these production estimates have an important bearing on each country’s commodity export prospects. The latest Conab estimate for the Brazil soybean crop is 147.7 MMT, with exports of 92.5 million. The USDA is 6.3 MMT higher on production at 154.

Also, Conab is forecasting Brazil’s soybean exports at 92.5 MMT, while USDA is 9.5 (350 mbu) higher at 102 million tonnes. For corn production and exports, Conab is 112 and 31. USDA estimates 122 and 50, or a whopping 19 million tonnes (750 mbu) greater on exports.

U.S. soybean crush and exports for the coming year are projected to rise by 125 mbu for both, with 105 million added to carry-out. Should Brazil’s crush and exports be more in line with Conab’s estimates, there is the potential for significantly larger soybean exports from the U.S. than the 1.825 bbu forecast.

Adding to the potential upside in soybeans is the impact of recent, historic floods in Rio Grande do Sul which some estimate could shrink the crop another 3 MMT or so due to damage and loss.

Key variable: export expectations

For corn, the USDA is forecasting 2024/25 U.S. corn exports to increase only marginally, up 50 mbu to 2.2 billion.

Competition for the five other major exporters (Argentina, Brazil, Russia, South Africa, and Ukraine) is expected to be about 100 mbu less in 24-25, providing Brazil’s exports are 49 MMT rather than the 31 MMT projected by Conab.

We are unsure where or how the differences in production estimates eventually will be resolved. However, U.S. export demand appears to have more upside than the current forecast indicates.

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