Rapid COVID-19 vaccine development has given new hope to ethanol production prospects. October 2020 corn consumption for ethanol rose to 432.7 million bushels – the highest monthly usage rate since February 2020.

But the latest uncontrolled virus surge across the country could dampen USDA’s outlook on ethanol demand in the short run. Weekly fuel demand had dropped 9% between the beginning and end of November as lockdown restrictions were reenacted to combat the virus’ spread.

USDA added 325 million bushels to its 2020/21 corn export estimate in last month’s WASDE. Nearly 2.7 billion bushels of corn exports remains aggressive when weekly loading volumes are only 9% higher than the five-year average, especially as corn exports move to seasonably lower shipping rates by mid-December.

Demand from China could continue to support price levels at the current demand estimate. China has committed to purchasing 440.1 million bushels of U.S. corn in the 2020/21 marketing year. But 70% of those sales have yet to leave U.S. ports.

Chinese corn demand will be exceptionally critical to corn price support going forward. Marketing year to date U.S. corn exports to China are more than 56 times higher than the same period in 2019/20. But shipments to 2019/20’s top five U.S. corn buyers (Mexico, Japan, Columbia, Honduras, and Costa Rica) in the first 13 weeks of the new marketing year are 1.3% lower than the same period in the old crop year.

Domestic soybean usage continues to soar to record levels. Crush rates recorded a new monthly record in October 2020 after USDA reported 196.5 million bushels had been processed for the month. The total eclipsed the previous high of 192.1 million bushels recorded in March 2020.

Soybean export loading paces and sales have been nothing short of extraordinary this year. International commitments of U.S. soy totaled 1.9 billion bushels as of November 26 – only 13 weeks into the current marketing year. So, it seems unavoidable that USDA will adjust 2020/21 soy exports higher than the current 2.2 billion bushel estimate in tomorrow’s WASDE reports.

Market chatter in recent weeks suggest smaller Chinese soy processors are more likely to cancel U.S. soy shipments at higher futures prices. But will it make a difference?

Nearly 73% of U.S. soybean cargoes shipped thus far in the 2020/21 marketing year were destined for China. Chinese and unknown buyers represent 689.4 million bushels of remaining exports – or 74% of total outstanding sales of U.S. soybeans. Export loading paces to China in the next couple months will be critical, before cheaper South American crops take over export channels.

Historical trends suggest that U.S. wheat exports record their lowest volumes of the marketing year during late October through late January. But so far during that period in 2020/21, U.S. wheat exports are nearly 9% higher than the five-year average.

USDA may readjust their 975-million-bushel 2020/21 U.S. wheat export target with this in mind, especially as lower global supplies and a dollar trading at nearly 20-month lows increase the attractiveness of U.S. wheat on the global stage.

Bumper crops in Canada and Australia, the world’s sixth and seventh largest wheat producers, will likely increase record-high ending wheat stocks in the 2020/21 marketing year. Canada and Australia are the world’s fourth and fifth largest global exporting bodies.

The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) places the 2020/21 Australian crop at 1.15 billion bushels as of last week. USDA’s current estimate is about 100 million bushels short of that forecast, so an adjustment may be warranted.

Results from a farmer survey conducted by Statistics Canada released last week suggest the Canadian wheat crop will rise 7.7% from a year ago to 1.293 billion bushels. USDA’s November forecast of 1.285 billion bushels is just slightly below that outlook. An 8-million-bushel adjustment is likely not enough to justify a USDA revision.

International wheat demand for livestock feed increased as global corn prices rose. A demand shift in favor of wheat usage could be in the cards if USDA expects corn prices to remain high.

Expect the global food hoarding to continue in the pandemic era. Global wheat imports are high in anticipation of global COVID-19 surges. Since we are in one currently, those domestic stockpiles are likely being put to use with nervous international governments likely looking – and eagerly – to buffer supplies to keep food prices stable.