Hungry for positive export news? USDA dished out a modest helping in its latest report covering the week ending August 15, out Thursday morning.
“Export sales last week were somewhat encouraging all around,” according to Farm Futures senior grain market analyst Bryce Knorr. “Totals don’t change the demand landscape, which remains challenged due to large global supplies on ongoing trade disputes. But at least there’s hope that business may not get much worse.”
China, for example, hasn’t cancelled large volumes of old crop sales that were purchased as a goodwill gesture during the brief lull in the trade war earlier this summer, and buyers there picked up a new cargo of crop, Knorr notes.
“China still has 87 million bushels of outstanding 2018 crop deals on the books as the marketing year winds down, with other buyers holding another 78 million bushels,” he adds. “But even if all those purchases are cancelled or rolled to new crop, the total for the marketing year is likely to reach USDA’s forecast because official Census exports are running 5% ahead of inspections.”
Even so, the ongoing trade war, as well as uncertainty about this year’s production, have been taking a toll on new crop bookings. The total so far is the lowest in 12 years as the new marketing year begins in just two weeks.
“New crop sales ahead of the start to the marketing year are a decent indicator of how final exports of soybeans turn out historically, though the connection has been through off by the trade war,” Knorr says.
Soybean exports found 1.0 million bushels in old crop sales plus another 29.1 million bushels in new crop sales last week, for a total of 30.1 million bushels. That was moderately ahead of the prior week’s tally of 26.0 million bushels and nearly double the average trade guess of 16.5 million bushels.
Soybean export shipments fared even better last week, at 43.1 million bushels. As the 2018/19 marketing year winds down, China remains the No. 1 destination for U.S. soybean export commitments, with 29% of the total. Other top destinations include the European union (16%), Mexico (10%) and Egypt (6%).
Corn exports also bested the prior week’s tally of 14.3 million bushels and trade estimates of 10.7 million bushels last week after total sales reached 16.6 million bushels. Corn export shipments were for 21.3 million bushels.
“New crop bookings of corn are the lowest in 14 year but aren’t a reliable indicator of how final sales will turn out,” Knorr says. “And there’s still uncertainty whether 2018 crop exports will meet USDA’s forecast. Shipments last week were way behind the rate needed to reach that goal. And total commitments – sales and shipments – are also behind. But official Census data is running ahead of the inspections total, so there’s still a chance the forecast could be met.”
Mexico remains the leading destination for U.S. corn export commitments as the 2018/19 marketing year nears its close, with 31% of the total. Other top destinations include Japan (26%), Colombia (9%) and South Korea (7%).
Wheat exports last week saw about 21.9 million bushels in old crop sales and another 200,000 bushels in new crop sales for a total of 22.0 million bushels. That beat out trade estimates of 14.1 million bushels and landed higher than the prior week’s tally of 14.1 million bushels. Export shipments were for 24.3 million bushels.
“Sales of 2019 wheat topped expectations and are off to a good start,” Knorr says. “Shipments are a little slow, but that’s likely due to harvest delays that kept wheat from hitting the export pipeline. Shipments picked up this week, a sign wheat is moving again.”
About 10 weeks into the 2019/20 marketing year, Mexico leads all destinations for U.S. wheat export commitments, accounting for 14% of the total. Other top destinations include the Philippines (12%), Japan (10%) and Nigeria (6%).