-Soybean sales higher than expected old crop/lower than expected new crop
-Corn sales at upper end of expectations
-Wheat sales at lower end of expectations
-SBM sales as expected/SBO sales slightly above expectations
Old crop soybean sales, for the week ended 7/02/20, were strong at 952k tonnes (35.0 million bushels), above market expectations of 300-800k tonnes, well above the previous three weeks’ average of 16.7 million bushels, the highest in four weeks and 2nd highest of the last seven weeks. Net old crop sales to China for the week were 394k tonnes, bringing their 2019/20 total purchases to 16.2 MMT vs 14.5 MMT at this time last year. China now has 3.3 MMT in unshipped 2019/20 purchases on the books vs 5.7 MMT last year. Total commitments of 1.689 billion bushels are down 5.3% from last year’s 1.783 billion, but are enough, in our opinion, to allow the USDA’s 1.650 billion bushel export projection to be reached, as long as there is a notable increase in shipping activity over the final 8 weeks of the marketing year. New crop sales were 382k tonnes (14.0 mil bu), below market expectations of 400k-1.0 MMT, with China accounting for half of the sales at 192k tonnes, with unknown for another 92k. Total commitments for 2020/21 now stand at 269 million bushels vs new crop sales at this time last year of 96 mil bu.
Old crop corn sales last week of 599k tonnes (23.6 mil bu) were at the top end of market expectations of 300-600k tonnes and were little-changed from the previous week’s upwardly-revised 24.2 mil bu (reported at 14.2 mil initially). More importantly, old crop corn sales are likely to slow dramatically in the coming weeks, but have shown little sign of that yet, averaging 20.2 mil bu/week over the last six weeks vs 7.7 mil bu/week during the same period last year and the mere 4.3 million/week we estimate sales need to average in order to reach the USDA’s 1.775 billion bushel export projection. We continue to feel corn exports are likely to modestly exceed the USDA’s projection by 30-50 million bushels. Total commitments of 1.689 billion bushels are still down 13% from last year’s 1.946 billion while the USDA’s export projection reflects a 14% decline. New crop sales of 409k tonnes (16.1 mil bu) were in the upper end of market expectations of 150-500k tonnes bringing 2020/21 total commitments to 169 mil bu vs 127 million at this time last year.
Wheat sales were 326k tonnes (12.0 mil bu), in the lower portion of market expectations of 200-550k tonnes, down slightly from the previous week’s 14.0 mil bu, but were a bit better than last year’s same-week sales of 10.4 mil bu. Through the first five weeks of the 2020/21 marketing year, sales have been uneventful, averaging 14.7 million bushels/week, a bit better than last year’s 12.2 million/week but hardly inspiring. Total commitments of 278 million bushels are essentially unchanged from last year’s 275 million, with wheat sales needing to average roughly 14.7 million bushels/week over the course of the marketing year to reach the USDA’s 950 mil bu export projection.
Soybean meal sales of 124k tonnes were respectable, falling within market expectations of 75-250k tonnes, comparable to the previous three weeks’ average sales of 112.4k tonnes/week and easily beating the roughly 67k tonnes/week needed to reach the USDA’s export projection. Total commitments are now down only 1.2% from last year vs USDA estimating exports down 1% year-over-year. Soybean oil sales of 29k tonnes were a 6-week high and were just above the range of market expectations of 5-25k tonnes. More importantly, soybean oil total commitments of 1.218 MMT are up nearly 50% from last year and are already enough to allow the USDA’s 2.700 billion pound export projection to be met with 13 weeks remaining in the marketing year. Accordingly, we see a further upward revision in the USDA’s export estimate coming at some point.
