June 4, 2020
Corn recorded a strong week in U.S. export channels for the week ending May 28 across the same time period that found the ICE Dollar Index weakening 1.5% as the economy recovers from the financial fallout of the COVID-19 pandemic. 2019/20 corn export sales rose 42.6% from the previous week to 30.1 million bushels, landing on the higher end of analyst expectations. And export shipments jumped up by 11.2 million bushels – over a quarter – from last week to 53.0 million bushels.
USDA is projecting 1.775 billion bushels of corn to be exported in the 2019/20 marketing year. This week’s figure of 53.0 million bushels keeps the U.S. on track to meet that goal. If U.S. corn growers can export at least 45.0 million bushels of corn per week for the remaining 14 weeks left in the current marketing year, ending U.S. stocks on September 1 will likely remain steady at 2.1 billion bushels of corn, or 82 days of supply left at the start of harvest.
Japan was by far the largest buyer of U.S. corn this week, with 17.6 million bushels destined for the Land of the Rising Sun. Nearly 9.2 million bushels were exported to Mexico this week. Mexico has been the top destination for U.S. corn this year, with our neighbor to the south purchasing 409.7 million bushels of corn to date. South Korea and Colombia rounded out the top U.S. corn purchases this week with 8.1 million and 7.5 million bushels, respectively.
2020/21 corn export sales dropped 40.9% from last week to 1.1 million bushels this week, at the lower end of analyst expectations.
Soybean sales struggle despite recent Chinese sales
Old crop soybean sales fell by 16.2 million bushels or 2.5% from the previous week to 23.4 million bushels for the week ending May 28. It was a rough week for U.S. soy growers as nearly 5.2 million bushels of export orders were cancelled.
Egypt led all buyers of U.S. soybean for the current reporting week with just shy of 7.0 million bushels of soybean exports. Indonesia (2.7 million bushels), Japan (2.7 million bushels), and Mexico (2.5 million bushels) rounded out the top export destinations for U.S. soybeans for the week.
Despite booking several new export sales this week, Chinese soy exports remained relatively low, registering nearly 322,504 bushels for the current reporting week. At 58.8 million bushels of total soybean exports this year, Chinese soy shipments are 24.0% higher than a year ago. However, Chinese soybean demand is 48.8% lower than the five-year average of exports. The export sales do spark hope for export demand, but price benefits are not realized for U.S. growers until those shipments leave port.
But there were a couple glints of optimism for soybean exports in this week’s report. 2020/21 soybean export sales nearly tripled from 7.5 million bushels last week to 22.3 million bushels this week. And weekly soybean export shipments increased 5.6 million bushels to 17.7 million bushels. For the current marketing year, 1.32 billion bushels of soybeans have been exported from American ports, which is on pace to surpass last year’s total of 1.72 billion bushels.
USDA has set lofty goals for soybean exports in the pandemic era. At 2.55 billion bushels forecasted for export in 2019/20, the U.S. will have to average at least 87.7 million bushels of soybean exports per week for the 14 weeks remaining in the 2019/20 marketing year to meet forecasted demand. With U.S. soy exports only averaging 33.9 million bushels per week and global demand lagging due to the COVID-19 pandemic, it seems likely that USDA will continue to cut soybean export forecasts for the 2019/20 marketing year.
Wheat inches to a lackluster close on the current marketing year
In the second-to-last reporting week in the 2019/20 export year for wheat, old crop export sales inched 643,000 bushels lower to 8.4 million bushels. Over 1.8 million bushels of old crop wheat export sales were cancelled for the week ending May 28. New crop export sales followed suit, dropping 11.2% from a week ago to 16.3 million bushels.
Ecuador was the top destination for wheat exports this week, with 7.2 million bushels shipped to the Central American country. China was the second-largest buyer of U.S. wheat in this week’s report at 6.9 million bushels. The Philippines (2.9 million), Nigeria (1.8 million), and Mexico (1.6 million) rounded out the top five export destinations for U.S. wheat last week. Mexico and the Philippines will likely jockey for first position as the top international buyer of U.S. wheat for the 2019/20 marketing year with 134.2 million bushels and 112.6 million bushels, respectively, going into the final week of the U.S. wheat marketing year.
But this week’s report was not entirely doom and gloom for wheat exports. As the marketing year creeps to a close, weekly export shipments rose by over a third to 27.7 million bushels. While USDA forecasted 970 million bushels of wheat exports for the 2019/20 marketing year, it seems more realistic that that number will only top 900 million bushels.
After this week’s report, the cumulative total of wheat exports for the year was 899 million bushels. It seems highly unlikely the U.S. will export an upwards of 70 million bushels of wheat this week, but it would not at all be surprising if a 20-million-bushel export week in the final week of the year pushes the 2019/20 closer to 925 million bushels.
For more information on weekly export sales and shipments, check out USDA’s full report here.
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