-Overall Export Sales weak in holiday activity
-Soybean sales lower than expected – marketing year low
-Wheat sales at bottom of market expectations
-Corn sales as expected, but well below “needed” pace and 8-week low
-SBM sales at bottom of expectations/SBO minor net cancellations
U.S. soybean sales, for the week ended 12/26/19, were a marketing year low at just 330k tonnes (12.1 million bushels), below market expectations of 350k-1.0 MMT, down from the previous week’s 27.1 million bushels and last year’s same-week sales of 38.6 million bushels. Net sales to China for the week were just 28.2k tonnes. Total commitments of 1.084 billion bushels are now down 4.8% from last year’s 1.138 billion, the largest year-over-year decline in commitments since mid-October as the impact of the quick push of Chinese purchases wears off and last year’s total sales over the most-recent 3-week period of 230.6 million bushels paled this year’s 91.8 million bushels in comparison. Based on the USDA’s 1.775 billion bushel export projection, we estimate soybean sales will need to average roughly 20.2 million bushels/week over the remainder of 2019/20 vs last year’s 18.7 million/week average from this point forward. With a larger Brazilian crop on the way, continued/additional Chinese buying certainly appears needed reach the USDA’s export target.
U.S. corn sales last week were an 8-week low of 531k tonnes (20.9 million bushels), which were within market expectations of 300-750k tonnes and in line with last year’s same-week sales of 19.8 million bushels. The overall weak export sales week isn’t all that surprising given the Christmas holiday, though. The largest sales this week went to Mexico with 238k tonnes, whose total purchases of 9.0 MMT are solidly below last year’s 10.9 MMT at this time. Overall total commitments of 723 million bushels remain down 42% from last year’s 1.253 billion bushels at this time and are the lowest in 7 years for late December and 2nd lowest of the last 33 years. In order to reach the USDA’s 1.850 billion bushel export projection, corn sales are going to need to average roughly 30.3 million bushels/week through the end of August, which would be a massive 49% stronger than last year’s 20.4 million/week average from this point forward and the 3rd strongest Jan-Aug sales program of the last 10 years. While slowing South American corn exports clearly are expected, we feel the time has likely come for USDA to lower their export projection in the upcoming WASDE report. The only caveat may be optimism over the Phase One trade deal and decision to hold the line for the time being.
U.S. wheat sales last week of 313k tonnes (11.5 million bushels) were a 4-week low and at the bottom end of market expectations of 250-800k tonnes, while falling notably from the previous week’s 26.3 million bushels and last year’s same-week sales of 21.8 million. Total commitments of 693 million bushels are still up 6% from last year’s 653 million at this time, while USDA is estimating 2019/20 exports up 4.2% from last year. Wheat sales of late certainly have been strong enough to support the USDA’s export target as sales will only need to average roughly 11.9 million bushels/week through the end of May vs last year’s 13.5 million/week from this point forward. We feel there is a modest potential USDA bumps their wheat export projection a bit higher in next week’s WASDE report.
U.S. soybean meal sales last week of 95k tonnes were at the bottom of market expectations of 75-250k tonnes and down from the previous week’s 138k tonnes. SBM sales have slowed of late, averaging 105k tonnes/week over the last three weeks, below the roughly 158k tonnes/week we estimate is needed to reach the USDA’s export projection, which would be above last year’s 140k tonnes/week average from this point forward. Total commitments are down 18% from last year vs USDA estimating SBM export to decline just 3% on the year. Soybean oil sales were minor net cancellations of 2k tonnes vs market expectations of sales of 5-30k tonnes. SBO sales were essentially non-existent last week while sales to unknown reflected a net decline of 7k tonnes. However, total commitments remain up more than 5% on the year vs USDA estimating a 12.4% decline in exports from last year and overall sales of late have been quite solid.
