March 25, 2019
Grain export inspections ticked mostly higher last week, with China fueling the pace for U.S. soybeans.
“China continues to load out its recent purchases or U.S. soybeans, with 12.3 million bushels inspected last week,” says Farm Futures senior grain market analyst Bryce Knorr. “That’s above the total seen a year ago and on average for the last five years, a trend that must continue through August if USDA’s target of 1.875 billion bushels is to be reached.”
As negotiators between the U.S. and China hold another round of talks this week, the uphill climb faced by U.S. soybean growers is taking shape, Knorr notes.
“Normally, this is a time of year when Brazil begins to dominate China’s purchases. But customs data released over the weekend shows Brazil already accounting for 45% of China’s purchases last month,” he says. “The U.S. share was only 20%, but that’s a marked improvement from levels since tariffs took hold last year.”
Another question how much China’s purchases can will be down this year, Knorr adds, which sets the base for growth of 2019 crop consumption.
“USDA projects just a 6% drop from 2017 crop levels this year,” he says. “But China’s imports through February are down 18%, halfway through the 2018 crop marketing year.”
For the week ending March 21, U.S. soybean exports reached 31.5 million bushels, which was just a hair above the prior week’s tally of 31.2 million bushels and on the high end of trade estimates that ranged between 22 million and 34 million bushels. The weekly rate needed to match USDA forecasts inched higher, to 33 million bushels, as cumulative totals for the 2018/19 marketing year cleared 1.049 billion bushels.
As Knorr mentioned, China was the top destination for U.S. soybean export inspections last week, with 12.3 million bushels. Other leading destinations included Egypt (6.9 million), the Netherlands (3.0 million), Japan (2.4 million) and Mexico (1.2 million).
Corn export inspections reached 39.2 million bushels last week, moderately exceeding the prior week’s total of 31.6 million bushels and ahead of the average trade guess, which ranged between 27 million and 37 million bushels. The weekly rate needed to match USDA forecasts still moved higher, however, to 47.3 million bushels. Cumulative totals for 2018/19 are now at 1.118 billion bushels, trending 23% higher year-over-year.
Mexico was the No. 1 destination for U.S. corn export inspections last week, with 8.8 million bushels. Other top destinations included Sri Lanka (7.6 million), Japan (7.5 million), Colombia (4.5 million), the Dominican Republic (2.9 million) and Costa Rica (2.3 million).
Wheat export inspections reached 12.5 million bushels last week, easing from the prior week’s tally of 14.2 million bushels and falling below the average trade guess that ranged between 14 million and 22 million bushels. The weekly rate needed to match USDA forecasts moved up to 24.2 million bushels, while cumulative totals for the 2019/19 marketing year are still 6% lower year-over-year after reaching 674 million bushels.
Nigeria was the No. 1 destination for U.S. wheat export inspections last week, with 2.1 million bushels. Other top destinations included Japan (1.9 million), Thailand (1.8 million), Kenya (1.6 million), South Korea (1.6 million) and Mexico (1.1 million).
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