-New crop soybean sales larger than expected, old crop at lower end of expectations
-New crop corn sales large as expected, old crop sales lower than expected
-Wheat sales slightly above range of ideas
-SBM sales lower than expected/SBO sales as expected
This week’s Export Sales data for soybeans lived up to expectations with new crop sales, for the week ended 7/16/20, of 2.327 MMT (91.6 million bushels) vs market expectations of 1.0-2.0 MMT, while old crop sales of 365k tonnes (13.4 million bushels) compared to expectations of 300-700k tonnes. For all intents and purposes, the level of old crop sales is largely irrelevant when it comes to reaching the USDA’s 1.650 billion bushel export projection as sales on the books are large enough to allow their target to be reached – it’s just a matter of whether it actually gets shipped by the end of August or rolled forward to 2020/21. This week’s activity included 210k tonnes in old crop sales and 1.486 MMT in new crop soybean sales to China, along with 669k tonnes in new crop sales to unknown, as well. China now has nearly 3.2 MMT (117 mil bu) in unshipped old crop sales on the books with six full weeks remaining in the 2019/20 marketing year. Based on cumulative exports to date, we estimate China will need to ship roughly 400-500k tonnes/week through the end of August in order for the USDA’s export projection to be reached. If not, old crop exports will likely come up short. Total old crop commitments of 1.715 billion bushels compare to 1.785 billion at this time last year. New crop total commitments are now at 382 million bushels vs 111 million a year ago and are now the highest in six years for mid-July, but still well below the 500+ mil bu at this time for the 12/13-14/15 marketing years. Through this week’s reporting period, China had 6.1 MMT of new crop soybeans on the books, with another 1.0 MMT in daily reported sales since then. The sales to China of late have certainly been impressive and psychologically supportive, but need to be kept in the big picture context. The USDA’s 2.050 billion bushel new crop export projection is only slightly below all-time record exports of 2.166 billion bushels and obviously implies at least a near-record export program to China over the next year. Record U.S. soybean exports to China are 36.1 MMT, indicating China will still likely need to buy another 30 MMT, give or take, of U.S. soybeans to reach the USDA’s new crop export projection.
Old crop corn sales last week were only 212k tonnes (8.7 mil bu), below market expectations of 4k-1.0 MMT and down from last week’s very strong sales of 38.6 million bushels. However, total commitments of 1.721 billion bushels are likely already enough to allow for the USDA’s 1.775 billion bushel export projection to be met when taking into consideration the differences between official Census Bureau and Export Sales data. We continue to feel exports are likely to slightly exceed the USDA’s projection. New crop sales were strong at 2.327 MMT (91.6 mil bu), in line with expectations of 1.5-3.0 MMT, bringing total commitments to 303 million bushels vs new crop sales at this point last year of 148 million. Current new crop sales are the largest in 7 years for mid-July and are the 4th highest on record. This week’s data reflected 1.96 MMT in new crop corn sales to China.
U.S. wheat sales last week were solid at 617k tonnes (22.7 mil bu), slightly exceeding the range of market ideas of 300-600k tonnes, but were slightly below last year’s same-week sales of 25.0 mil bu and down from the previous week’s marketing year high sales of 28.2 mil bu. Total commitments of 329 million bushels are holding onto a a slight 5% gain relative to last year’s 313 million. We estimate wheat sales will need to average roughly 14.2 million bushels/week over the course of the marketing year in order to reach the USDA’s 950 million bushel export projection vs last year’s 14.2 mil bu/week average from this point forward.
Old crop soybean meal sales of 45k tonnes were below expectations of 100-300k tonnes, while new crop sales of 54k tonnes were within expectations of 0-75k tonnes. This week’s old crop sales were a marketing year low and down from the 148k tonne/week average over the previous three weeks, but sales only need to average roughly 58k tonnes/week in order to reach the USDA’s export projection. Total commitments are down less than 1% from last year, in line with the USDA projecting SBM exports essentially unchanged on the year. Soybean oil sales were 20.2k tonnes, in line with expectations of 5-30k and up from the previous week’s 5.7k tonnes. We estimate soybean oil sales only need to average roughly 6k tonnes/week through the end of September in order for the USDA’s export projection to be reached. Total commitments are up 50% from last year vs USDA projecting a 47% increase in annual exports.
