The devastating drought in 2012 forced Japan, long the top buyer of U.S. corn, to look elsewhere for feedstuffs. While sales of 2013 corn were slow to recover after harvest, low prices encouraged Japanese customers to return to the fold. They bought 31.4 million bushels in the latest week, helping stretch total bookings to one of their best totals in almost three years. Old and new crop sales in all came in at 76.5 million bushels, enough to push futures to modest gains at the 7:45 a.m. morning break in Chicago.
Only a quarter of the business with Japan was announced previously under USDA's separate daily reporting for large purchases, making the size of the deals somewhat of a surprise. Other big buyers included "unknown destinations," Egypt, South Korea and Spain, whose purchases included a shipment rejected by China for containing an unapproved GMO trait. That dispute hung over the market until today's big numbers were announced.
The latest purchases mean 87% of USDA's forecast for the entire marketing year has already been sold or shipped, far ahead of the average pace for the end of January. This increases the likelihood for total exports to be greater than the government currently forecasts. USDA announced the sale of 5 million more bushels of old crop corn to unknown destinations under the daily reporting system, after the weekly totals came out.
Wheat exports were a pleasant surprise, too, at 29.2 million bushels, doubling trade expectations. Japan was also the leading buyer of wheat, closely followed by South Korea, with Nigeria, Philippines and Taiwan all taking more than one load. The new deals keep total commitments stronger than normal, despite plenty of competition on world markets.
Soybean sales were pretty much in line with trade guesses, with 18.2 million bushels of old crop and 13.6 million of new crop business done during the latest week. China as usual was the biggest old crop buyer, though it accounted for only half the total as it begins to source more originations from South America. While many of this week's sales were switched from previously announced deals with unknown destinations, no outright cancellations showed up from China, as feared by the trade. That helped March futures recover from selling earlier in the overnight session.