-Soybean exports below expectations – marketing year low
-Corn exports at top end of expectations, but still well below “needed” pace
-Wheat exports as expected
U.S. soybean exports, for the week ended 2/06/20, were just 604k tonnes (22.2 million bushels), below market expectations of 700k-1.35 MMT (25.7-49.6 mil bu), down sharply from the previous week’s 1.374 MMT (50.5 mil bu), as well as last year’s same-week exports of 1.151 MMT (42.3 mil bu) and were the lowest of the first 23 weeks of the 2019/20 marketing year so far. Exports to China this week were only 135k tonnes as outstanding purchases have moved to minimal levels. Based on last week’s Export Sales data, China may have as little as 476k tonnes (17.5 mil bu) of unshipped soybeans remaining on the books if they don’t have any purchases still reflected as “unknown.” We have long-discussed the expected/likely notable decline in U.S. soybean shipments forthcoming without new Chinese purchases and that time appears to be now. It is concerning this week’s exports were below the roughly 24.2 million bushels/week we estimate the will need to average through the end of August in order to reach the USDA’s 1.775 billion bushel export projection, which would be the 3rd highest on record for Feb-Aug exports below only last year’s 29.1 million/week and 2017/18’s 25.7 million/week. Remember, last year’s late season exports were uncharacteristically very strong as China waited until the final two months of the marketing year to ship their remaining pre-trade war purchases. It appears additional Chinese purchases of old crop soybeans may be necessary if the USDA’s export projection is to be reached. Cumulative exports of 1.000 billion bushels are still up 20% from last year’s 835 million given the more traditional seasonal export pattern experienced this year vs last year. There is nothing in the actual shipment/sales data at this time to justify a USDA export estimate revision in tomorrow’s WASDE report if they go purely off the “numbers on the books.”
U.S. corn exports last week of 769k tonnes (30.3 mil bu) were at the upper end of market expectations of 500-800k tonnes (19.7-31.5 mil bu) and were up from the previous week’s 562k tonnes (21.1 mil bu), but were again well below the roughly 41.0 million bushels/week we estimate corn exports need to average through the end of August in order to reach the USDA’s 1.775 billion bushel export projection. Corn exports continue to improve and last week’s 30.3 million bushels were actually the 2019/20 marketing year high so far, but the fact they were so far below the “needed” pace is still disappointing. With the increase in new export sales being made of late, shipments will correspondingly continue to improve, as well. It’s simply going to come down to whether the hole that has been dug already is too large to get out of or not if the USDA’s projection is to be met. We’re still holding out optimism 2019/20 exports will reach the USDA’s estimate as South American exports are slowing dramatically in seasonal fashion and the current average “needed” pace is actually below that of the entire 2013/14-2017/18 average weekly exports from this point forward of 46.1 million bushels/week. Last year’s Feb-Aug exports averaged just 32.5 million bushels/week, though. For now, we see USDA holding the line on their export projection in tomorrow’s WASDE report. Cumulative exports of 453 million bushels are still down nearly 51% from last year’s 915 million, but at least it’s better than the 60%+ year-over-year shortfall in early November.
U.S. wheat exports last week were 524k tonnes (19.2 mil bu), in line with market expectations of 300-600k tonnes (11.0-22.0 mil bu) and were up from the previous week’s 436k tonnes (16.0 mil bu) but below last year’s same-week exports of 563k tonnes (20.7 mil bu). Most importantly, though, wheat exports continue to progress generally in line with the USDA’s export projection with this week’s shipments exactly on pace with the average “needed” level, and three of the last five weeks’ exports meeting/exceeding “needed” exports, as well. Last year’s exports finished strong, averaging 21.5 million bushels/week during Feb-May and a similar situation will be needed this year, as while recent exports have been respectable, over the last 8 weeks average weekly wheat exports of 16.5 million bushels are a bit below the pace needed. Cumulative wheat exports of 631 million bushels are still up nearly 12% from last year’s 566 million, but declining. We see USDA holding the line on their export projection in tomorrow’s WASDE report.
