Even with trade war rhetoric heating up between the U.S. and China over this past week, Chinese buyers appear to be following through on earlier soybean commitments on deals made during a brief cease-fire as a goodwill gesture, according to Farm Futures senior grain market analyst Bryce Knorr.
“China led all destinations in today’s export inspection report, taking 21.3 million bushels,” he says. “That leaves around 135 million bushels to be shipped out over the next month. Overall inspections remain on target to reach USDA’s forecast for the 2018 marketing year, at least a little bit of solace.”
Total soybean export inspections for the week ending August 1 reached 37.8 million bushels, which was just below the prior week’s tally of 39.1 million bushels but on the high end of trade estimates, which ranged between 22 million and 40 million bushels. The weekly rate needed to match USDA forecasts eased to 32.7 million bushels, while year-to-date totals for 2018/19 are now at 1.505 billion bushels – still falling 22% short of last year’s pace.
Aside from China’s 21.3 million bushels, other top destinations for U.S. soybean export inspections last week included Mexico (3.7 million), the Netherlands (2.9 million), Spain (2.4 million) and Egypt (2.1 million).
Corn export inspections last week were less than stellar, scraping up 24.9 million bushels. That was slightly behind the prior week’s tally of 26.3 million bushels and on the low end of trade estimates that ranged between 23 million and 29 million bushels. The weekly rate needed to match USDA forecasts moved higher, to 40.4 million bushels, while cumulative totals of 1.811 billion bushels are lagging 9.4% lower year-over-year.
“Corn inspections appear increasingly unlikely to reach USDA’s target,” Knorr says. “That could leave more corn 2018 crop leftover as a cushion for what we expected to be a short 2019 crop.”
Last week, Japan and Mexico led all destinations for U.S. corn export inspections, with 8.4 million bushels each. Other top destinations included El Salvador (2.7 million) and Saudi Arabia (2.3 million).
Wheat export inspections also remained subdued last week, with 14.5 million bushels. That was slightly behind the prior week’s tally of 15.2 million bushels and just on the low end of trade estimates, which ranged between 12 million and 18 million bushels. The weekly rate needed to match USDA forecasts moved up to 18.3 million bushels, although 2019/20 marketing year totals of 140 million bushels remain 26% higher year-over-year for now.
“The good news: A lot of buyers are lining up to take delivery,” Knorr says. “The bad news: None of those deals are involving more than a single cargo.”
Some of those destinations include Mexico, the Philippines and South Korea – each accounting for 2.1 million bushels – followed by Peru and Chili, both with 1.3 million bushels.