-Ukraine/Bulgaria wheat exports seen lower/Russia higher
-Ukraine PM says old crop wheat exports will not be restricted
-Low water levels continue to plague Argentine exports
-USDA reports soybean/corn sales
-Export Sales mostly uneventful/SBO strong
Ukraine’s grain traders union UGA sees 2020/21 wheat exports declining to around 18.0 MMT from 20.5 MMT estimated for this year, but corn exports could set a new record of 30.0 MMT vs 2019/20’s 29.0 MMT. While not a major soybean player, the union sees this year’s crop at 4.225 MMT vs 3.713 MMT last year, allowing exports to rise marginally to 2.700 MMT from 2.675 MMT this year.
Ukraine’s Prime Minister said they will not restrict wheat exports through the end of the 2019/20 marketing year despite the previously-agreed export quota having already been met.
SovEcon expects 2020/21 Russian wheat exports to be 36.8 MMT, up 3 MMT from 2019/20, with total grain exports of 47.4 MMT up 3.9 MMT from this year. If achieved, the total grain export estimate reflects the 2nd largest program on record after 2017/18. They put this year’s Russian wheat crop at 81.2 MMT vs 74.5 MMT last year (USDA 77.0 MMT this year/73.6 MMT last year), with the total grain crop estimated at 126.3 MMT vs 121.2 MMT last
USDA reported the sale of 132k tonnes of soybeans to China this morning, with 66k tonnes for 2019/20 and 66k for 2020/21. The sale of 102k tonnes of corn to unknown for 2019/20 was reported, as well.
Bulgaria sees this year’s wheat crop declining to around 5.0 MMT from last year’s 6.1 MMT and could allow for exports around 3.0-3.2 MMT after domestic demand of roughly 1.8 MMT is met. Wheat exports have already reached 4.3 MMT for the 2019/20 crop year.
Argentine wheat planting is gaining steam, now 13.4% complete according to the Buenos Aires Grains Exchange. They see the crop rising to 21.0 MMT this year, in line with the USDA’s estimate, up from last year’s 19.5 MMT and reflecting a new record. They put the Argentine soybean harvest at 97% complete and expect a crop of 49.5 MMT (USDA 53.5 MMT/51.0 MMT last year USDA), while corn harvest is 47% complete, with the crop estimated at 50.0 MMT (USDA 50.0 MMT/50.0 MMT last year USDA).
Historically low water levels on the Parana River continue to plague the Argentine grain export program as vessels are forced to reduce loadings and have run aground at times. A ship carrying 42k tonnes of SBM blocked traffic at Rosario yesterday after running aground. Some have cited as many as 10 previously-sold Argentine grain shipments being switched to Brazilian origin given the current shipping issues, with most being for June-July loading.
French soft wheat crop conditions declined 1% good/excellent this week to 56% g/e as dry conditions continue. Current conditions are the lowest in 9 years for late May, while last year’s crop at this time was rated 79% g/e. Corn conditions declined 3% g/e to 83%, while last year was 81% g/e. Barley and durum wheat conditions are well below year ago levels, as well.
Thailand passed on their tender for 227.5k tonnes of feed wheat for Aug-Oct shipment periods, citing prices offered around $215/tonne c&f being too high vs the $205-$210 sought.
Please see our Market Insights post at https://portal.rjobrien.com/MarketInsights/Blog/Read/40260 details on the USDA Export Sales report.
U.S. corn export sales were disappointing at 427k tonne (16.8 million bushels) relative to market expectations of 500k-1.0 MMT and were the lowest in 20 weeks going back to the holiday week of 01/02/20. However, given the very strong pace of sales since early March, averaging 45.7 million bushels/week over the previous 11 weeks, sales still beat the roughly 11.0 million bushels/week we estimate is needed to reach the USDA’s export projection.
U.S. soybean sales were 644k tonnes (23.7 million bushels), in line with expectations of 400-900k tonnes, and were better than last year’s same-week sales of 14.6 million bushels, as well as the estimated 9.0 million bushels/week sales will need to average through the end of August in order for the USDA’s export projection.
U.S. wheat new crop sales were solid at 497k tonnes (18.2 million bushels), beating market expectations of 100-300k tonnes and putting 2020/21 total commitments at 111 million bushels vs 137 million in new crop sales at this time last year with only one full week before the start of the new year. However, new crop sales are the 2nd lowest of the last 11 years at this point in time.
U.S. soybean meal sales of 127k tonnes were at the bottom of market expectations of 100-300k tonnes, but still met the roughly 93k tonnes/week we estimate is necessary to allow the USDA’s export projection to be reached. Soybean oil sales were strong at 57k tonnes, easily beating market expectations of 5-30k tonnes and followed the previous week’s strong 62k tonnes, as well.