-Corn sales weak again – much lower than expected
-Soybean sales tepid but as expected
-Wheat sales modest as expected
-SBM/SBO sales at bottom of expectations
-SBM/SBO sales at bottom of expectations
U.S. corn sales, for the week ended 6/06/19 were just 169k tonnes (6.6 million bushels), well below already-weak market expectations of 250-550k tonnes and followed the previous week’s net cancellations of 8.8k tonnes. Very little new sales activity was reported for the week, with most simply reflecting switches out of unknown destinations to reported countries. Total commitments of 1.906 billion bushels are now down nearly 14% from last year after being even with year ago levels in late February. Based on the USDA’s 2.200 billion bushel export projection, corn sales will still need to average roughly 16.9 million bushels/week through the end of August, strongly than last year’s average sales from this point forward of 14.2 million bushels/week, which certainly is questionable given the sales activity of late and very large South American crops. New crop sales were also weak at just 94k tonnes vs market expectations of 100-300k.
U.S. soybean sales last week of 256k tonnes (9.4 million bushels) were within market expectations of 200-500k tonnes, but were the lowest in five weeks and well below last year’s same-week sales of 19.1 million bushels. The outlook for reaching the USDA’s old crop export projection is a difficult one at this time as it will be highly dependent on what happens with the large amount of Chinese purchases currently on the books. Total commitments of 1.725 billion bushels already exceed the USDA’s just-lowered 1.700 billion bushel export projection, indicating very little, to no, additional sales would be needed to reach the USDA’s projection under a typical shipping situation. However, China still has 6.3 MMT (231 million bushels) of unshipped sales on the books and if the majority of those end up getting rolled into the next marketing year and/or canceled, sales would actually need to still average around 12 million bushels/week to reach the USDA’s export estimate. It’s all going to come down to what China does with the sales currently on the books. This week’s sales activity did include 68k tonnes of previously-reported sales as unknown being switched to China and minimal new net sales of 8.1k tonnes. New crop sales of 275k tonnes compared to market expectations of 100-300k
U.S. wheat sales, in the first week of the 2019/20 marketing year, were 325k tonnes (12.0 million bushels), in line with market expectations of 250-450k tonnes and put total commitments at 226 million bushels to start the marketing year, solidly above last year’s 166 million at this time. Based on the USDA’s 900 million bushel export projection and the increased level of sales on the books to start the year relative to a year ago, wheat sales will need to average roughly 12.6 million bushels/week over the course of 2019/20 to reach the USDA’s projection vs last year’s marketing year average weekly sales of 15.3 million bushels.
U.S. soybean meal sales of 113k tonnes were at the extreme bottom end of market expectations of 100-250k tonnes and were little-changed from the previous week’s 111k tonnes, but above last year’s same-week sales of 75k tonnes. More importantly, though, they were still above the roughly 77k tonnes/week we estimate they need to average to reach the USDA’s just-raised 14.0 million ton export projection as the overall SBM sales pace remains quite solid. Total commitments are currently essentially unchanged from last year vs USDA projecting a 5.6% decline in exports on the year. Soybean oil sales were minimal at 5.1k tonnes (8-25k expected), but with only roughly 7k tonnes/week “needed” on average to reach the USDA’s export projection, it is hard to be disappointed by the week’s sales in that context. Total commitments are currently down 14% from last year vs USDA projecting a 12% decline in exports on the year.
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