-New crop corn sales at very top of expectations, old crop sales at very bottom
-New crop soybean sales above expectations, old crop sales as expected
-Wheat sales within expectations
-SBM/SBO sales solid
Old crop corn sales for the week ended 7/30/20 were minimal at 102k tonnes (4.0 million bushels), at the very bottom of market expectations of 100-600k tonnes and followed last week’s net cancellations of 1.2 million bushels. However, we estimate corn sales likely only need to average roughly 3.8 million bushels/week over the final four weeks of the 2019/20 marketing year in order for the USDA’s 1.775 billion bushel export projection to be reachable. At this point, it appears old crop exports should fall within roughly 20 million bushels of their estimate as long as the shipment pace remains steady to end the year. New crop sales were very large at 2.600 MMT (102.3 million bushels), pushing the top end of market expectations of 2.0-2.6 MMT as large sales were expected given the previously-announced Chinese purchases. This week’s activity included the 1.937 MMT sold to China, as well as 253k tonnes by Mexico and 276k tonnes by unknown. Total commitments for 2020/21 now stand at 430 million bushels vs 160 mil bu in new crop sales at this time last year and are the largest as of late July in 24 years. China has a total of 5.72 MMT of U.S. new crop corn on the books.
Old crop soybean sales were 345k tonnes (12.7 mil bu), within expectations of 200-550k tonnes, but once again looked better than they actually were as USDA revised last week’s sales down to only 2.8 million bushels from the initial reporting of 9.5 million bushels. Without the revision, this week’s sales would have been 6.0 million bushels. The level of old crop sales at this point, relative to the USDA’s export projection, is largely irrelevant as total sales on the books already are more than enough to allow the USDA’s 1.650 billion bushel export projection to be reached. It’s just a matter of actually getting it shipped, which continues to lag. China still has 2.9 MMT in old crop purchases on the books and has only been loading 1-2 vessels (60-120k tonnes) per week in recent weeks. It will likely require a good portion of their old crop sales being shipped over the last four weeks of the marketing year if the USDA’s export projection is to be met. New crop sales of 1.405 MMT (51.6 million bushels) were above market expectations of 600k-1.2 MMT, with sales of 474k tonnes to China included in this week’s activity, along with 352k to Mexico and 213k to unknown. Total new crop commitments of 566 million bushels compare to only 134 million at this time last year and are the largest in six years for late July. China has 8.565 MMT of new crop soybeans on the books through July 30 with an additional 318k tonnes in sales reported in daily announcements since then.
U.S. wheat sales last week of 606k tonnes (22.2 mil bu) were within market expectations of 200-800k tonnes, but were again better than year ago sales of 17.9 million bushels as five of the last six weeks’ sales reflected stronger sales than last year. Total commitments of 376 million bushels are now up 9% from last year’s 344 million, leaving sales needing to average roughly 13.8 million bushels/week over the 2020/21 marketing year in order to reach the USDA’s 950 million bushel export projection vs last year’s 15.0 mil bu/week average sales from this point forward. While wheat sales above better than the last two years through late July, they are quite typical, being right in line with the 374 million bushels in average total commitments at this time over the last 10 years.
Old crop soybean meal sales were strong at 328k tonnes (100-450k expected), while new crop sales were solid, as well, at 204k tonnes (200-300k expected). With two full months left in the 2019/20 marketing year, SBM sales have already reached a level which would allow the USDA’s export projection to be reached. Old crop sales over the last five weeks have averaged 187k tonnes/week vs only 81k/week average during the same period last year. New crop sales so far of 761k tonnes, though, remain below last year’s 1.053 MMT at this time and have been slow to develop in historical comparison. Old crop soybean oil sales were 24.4k tonnes (5-30k expected), easily exceeding the roughly 5.8k/tonne average “needed” sales pace. Over the last seven weeks, SBO sales averaged 14.8k tonnes/week.
