USDA reports surge in grain inspections for export

The U.S. Department of Agriculture’s Federal Grain Inspection Service (FGIS) reported a significant increase in grain inspections for export during the third quarter of 2024. Total inspections of corn, soybeans, and wheat reached 25.3 million metric tons (mmt), marking the highest level for third-quarter inspections since 2020. This figure represents a 52% increase from the same period in 2023 and a 6% rise compared to the five-year average.

The rise in inspections across all three major commodities was largely driven by increased demand from key markets. Corn inspections soared due to higher shipments to Mexico and Japan. Wheat inspections rose, buoyed by demand from Korea and Mexico, while soybean inspections benefited from increased orders from Indonesia, Mexico and Egypt.

However, the overall gains in U.S. grain inspections were partly offset by a significant decline in shipments to China. Inspections of soybeans bound for China fell 29% year-over-year, primarily due to competition from Brazilian exports and increased domestic production in China. Corn inspections to China dropped an alarming 96%, attributed to a strong domestic corn crop reducing import needs. Wheat inspections to China decreased by 57%, as the country exceeded its tariff-rate quota for wheat imports, leading to higher import costs.

Regional breakdowns show a varied landscape for grain inspections. In the Pacific Northwest (PNW), inspections totaled 6.2 mmt, up 130% year-over-year, while Interior inspections reached 5.9 mmt, a 44% increase. In contrast, the U.S. Gulf inspected 12.9 mmt, reflecting a 35% increase from the previous year but a 3% decline from the five-year average. Inspections in the Atlantic-Great Lakes region were modest, totaling 0.3 mmt, which was up 24% year-over-year but down 43% from the five-year average.

Commodity breakdown

• Corn: Inspections reached 13.3 mmt, a 95% increase from last year, largely due to higher demand from Mexico and Japan, despite a 96% drop in exports to China.

• Soybeans: Inspections totaled 5.2 mmt, up 7% from last year but down 35% from the five-year average, mainly due to increased exports to Indonesia, Mexico, and Egypt.

• Wheat: Inspections amounted to 6.9 mmt, a 37% increase year-over-year, attributed to higher inspections for Korea, Mexico, and other Latin American countries.

Market outlook

The USDA's October World Agricultural Supply and Demand Estimates (WASDE) report projected a slight increase in exports for the 2024/25 marketing year, forecasting 59.1 mmt of corn exports, 50.4 mmt of soybeans, and 22.5 mmt of wheat. These projections reflect adjustments based on current market trends and demand patterns.

As the agricultural sector navigates changing market dynamics and competition from global exporters, the recent uptick in grain inspections underscores the resilience of U.S. grain producers and their ability to adapt to shifting demand landscapes.