The U.S. has plenty of grain and so do our competitors, but struggling economies overseas rather than crop sizes will determine how well crop exports go in 2016.
Related: U.S. ag prices remain under pressure
China and Japan, both big buyers of U.S. crops, have economic stimulus plans that are either already in place or coming soon. That will weaken the buying power of their currencies. Brazil's economy also is weak, and the lower real makes its soybeans less expensive to Chinese buyers than those from the U.S., thus capturing a larger share of that market.
"The big impediment to exports is the weak global economy. There is little reason to believe strong exports will pull us out of the low prices we have now," says Philip Abbott, an ag economist at Purdue University. "I think next year is not going to be a big export year."
USDA agrees it has corn exports at 1.85 billion bushels down from 1.875 billion last year and 1.92 billion two years ago. Soybean exports are seen at 1.7 billion vs. 1.8 billion last year. Of course, that would be better than two years ago when they were nearly 1.64 billion.
The big problem for soybeans may be China. The country's financial troubles, tied to a slowing economy, could have a big impact on U.S. soybean trade and prices.
"If consumption there is stagnating, then that could have a long-term effect on commodities," says Abbott.
Also, feed barley is taking away some corn demand, particularly in Europe and Saudi Arabia, while distillers grains and grain sorghum displace some corn in China.
The problem for wheat is competition. The Black Sea and Europe have big crops and can ship to the Middle East and Africa at lower cost than the U.S. Also, Australia, which can ship to Asian buyers, raised its wheat export forecast to 17.5 million tons from a previous 16.46 million. That is still shy of USDA's forecast of 18.5 million.
Currencies are part of the problem for crop exports. The U.S. has exited its stimulus program, which pushed the dollar higher. More gains may be in store should interest rates go higher. Meanwhile, yens, yuans, reais and others are slipping.
"There is nothing to suggest that the dollar will get weaker," says Abbott. "Everything that is going on in the global economy now indicates that it is going to stay strong."
Other smaller buyers of U.S. crops have ramped up purchases, but their buying power and consumption needs do not match China's and Japan's. Latin American countries have become good customers. Colombia has recovered from its drug cartel days and has been a thriving country and an important buyer of U.S. crops, particularly corn. Peru is another.
USDA's latest supply-and-demand tables project global corn production at 38.5 billion bushels, the smallest in years, but much of that decline is in the U.S. and Europe. However, that is offset by key buyers, such as South Korea, Southeast Asia and China, who are expected to take less because of either weak economies or increased production in their respective countries.