-Solid Export Sales week across the board relative to expectations
-Corn/wheat sales above expectations
-Soybean sales at top end of expectations
-SBM/SBO sales solid
U.S. corn sales, for the week ended 11/29/18, were solid at 1.178 MMT (46.4 million bushels), coming in above market expectations of 800k-1.1 MMT, and followed last week’s rather solid sales, as well, of 49.9 million bushels. Additionally, sales were better than last year’s same-week sales of 34.5 million bushels, with the respectable sales in recent weeks allowing total commitments, now at 1.053 billion bushels, to tick back higher relative to year ago levels, as the current 16.8% year-over-year gain (902 million in sales last year) reflects an improvement from the 13.4% gain two weeks ago. However, the focus for the corn export program is not necessarily on the immediate timeframe as the January through mid-March period looms large with the 11-week period last year seeing corn sales average 69.2 million bushels (1.76 MMT)/week, as 762 million bushels (19.3 MMT) of sales were put on the books during the period. Without any indication at this time of weather complications for South America’s crop, we anticipate the 2018/19 U.S. corn export picture looking much less rosy compared to last year as we go through the first quarter of 2019. Our concern continues to lie with the fact that corn sales will need to average roughly 35.3 million bushels/week over the 9 months to reach the USDA’s export projection, not too far off of last year’s record pace of 38.0 million/week from this point forward. The largest sales this week went to Mexico with 310k tonnes, followed by Japan with 293k.
U.S. soybean sales last week were respectable at 891k tonnes (32.7 million bushels), which were at the extreme top end of market expectations of 600-900k tonnes, were up from the previous week’s 23.1 million bushels and actually were the best in 9 weeks. However, once again this week’s sales were dwarfed by last year’s same-week sales of 71.6 million bushels, resulting in a further decline in the year-over-year sales comparison with total commitments of 887 million bushels now down 33.4% from last year’s 1.333 billion bushels at this time. The largest sales for the week were reflected in unknown destinations with new sales of at least 336k tonnes, with the largest actually reported net sales going to Spain with 135k tonnes. Until something is actually announced regarding expected Chinese purchases, the 2018/19 export program will continue to look rather poor with the USDA’s 1.900 billion bushel export projection appearing to be clearly in jeopardy. Currently, in order to reach the USDA’s export projection, sales would need to average roughly 26.7 million bushels/week through the end of August, 25% stronger than last year’s average record sales from this point forward of 21.3 million bushels/week. A large purchase by China would certainly help to improve that situation.
U.S. wheat sales last week were definitely decent at 712k tonnes (26.2 million bushels) as they beat market expectations of 300-600k tonnes, were up solidly from the sales of the previous three weeks, which ranged from just 12.1-16.1 million bushels, were well above year ago same-week sales of 11.8 million bushels and were the best in 16 weeks (2nd best of 2018/19). This week’s sales included the previously-announced Egyptian purchase of 120k tonnes of SRW, but also 126k tonnes to Mexico and 109k to Thailand. Wheat sales over the last 6 weeks have averaged 18.9 million bushels, a bit above the roughly 17.0 million/week in which they will need to average during Dec-May in order to reach the USDA’s 1.025 billion bushel export projection, and better than last year’s average sales during the same period of 14.2 million bushels/week. Accordingly, total commitments of 573 million bushels continue to whittle away at the year-over-year deficit, now being down 11% from last year’s 643 million bushels after being down 20% in mid-September. However, there remains a long way to go on that front as the USDA continues to look for 2018/19 exports to be up nearly 14% from last year.
U.S. soybean meal sales were solid at 287k tonnes and, while within market expectations of 175-400k tonnes, they easily surpassed the average “needed” pace of 143k tonnes/week, with total commitments up nearly 18% from last year vs USDA projecting a 7% decline in exports on the year. Soybean oil sales of 21.0k tonnes were also within expectations of 8-26k tonnes and were above the roughly 14.4k tonnes/week they need to average to reach the USDA’s export projection. SBO total commitments are up 49% from last year, while USDA is estimating 2018/19 export to decline 10% from year ago levels in the end. A slowdown in exports relative to last year during the 2nd half of the marketing year is very likely should Argentina’s soybean crop rebound from last year in dramatic fashion as currently expected.
