-Corn sales strong again amid seasonal South American slowdown
-Soybean sales disappointing as sales to China remain very limited
-Wheat sales at upper end of expectations – continue to outpace “needed” rate
-SBM continue to blister – SBO sales solid
The long-awaited/discussed rebound in U.S. corn export sales appears to be underway with another week of strong sales as the South American export program winds down. This week’s 1.235 MMT (48.6 million bushels) sales were above market expectations of 600k-1.2 MMT, were up from the previous week’s 40.3 million bushels, were the highest in six weeks and the 3rd highest of the first 21 weeks of the 2019/20 marketing year. More importantly, they were solidly above the roughly 27.7 million bushels/week corn sales need to average in order to reach the USDA’s 1.775 billion bushel export projection – the 3rd consecutive week of meeting/exceeding the average “needed” sales pace. The largest reported sales of the week went to Mexico with 190k tonnes, followed by Colombia with 118k and Guatemala with 106k. There were sales of 494k tonnes to unknown, as well, though. While direct comparisons to year ago sales levels are not currently available due to last year’s government shutdown, total commitments of 849 million bushels are estimated down around 39% from last year vs the 45% decline in late November as sales start to claw their way back. The USDA is currently projecting 2019/20 exports down just 14% from last year so plenty of work is yet to be done.
U.S. soybean sales were disappointing at 470k tonnes (17.3 mil bu), falling in the lower end of market expectations of 400k-1.0 MMT, below the previous two week’s 29.0 mil and 23.3 mil bu and below the roughly 20.2 mil bu/week sales needed to average in order to reach the USDA’s 1.775 billion bushel export projection. New net sales to China were just 151k tonnes last week, with 210k being switched from previously-reported unknown. Sales to other reported destinations were extremely limited last week, which is a concern moving forward. Sales reported as unknown were just 24k tonnes. Total commitments of 1.164 billion bushels are down an estimated 5-6% from last year. Direct comparisons to year ago data will resume for the week ended 2/13/20. During the six-week period in which sales data was not reported last year, soybean sales totaled 235 million bushels. During the first three weeks this year of the comparable period, sales have totaled just 70 million bushels.
U.S. wheat sales continue to impress with 646k tonnes (23.7 mil bu) sold last week, at the upper end of market expectations of 300-700k tonnes and well above the roughly 10.3 mil bu/week wheat sales need to average in order to reach the USDA’s 975 million bushel export projection. In fact, each of the last three week’s sales and 9 of the last 11 week’s sales have exceeded the “needed” pace, averaging 19.2 mil bu/week over the period. Wheat sales from this point forward last year averaged 12.5 million bushels/week. Total commitments of 769 million bushels are up an estimated 6% from last year vs USDA’s estimating marketing year total exports rising 4.2% on the year. With the continued respectable sales pace, while entering the final stretch of the 2019/20 marketing year with 18 weeks remaining, we feel there is a decent chance USDA will bump their export projection higher in the February 11 WASDE report.
U.S. soybean meal sales simply continue to blister with another huge week of 439k tonnes sold, following the previous week’s 6-year high sales of 642k tonnes and 375k tonnes two weeks ago. SBM sales were at the upper end of trade expectations of 200-500k tonnes. Total commitments of 7.069 MMT are now down an estimated 7-8% from last year after being down nearly 20% just five weeks ago. This week’s activity included 131k tonnes to Ecuador, 67k to Guatemala and 67k to Colombia. The USDA is estimating 2019/20 SBM exports to decline 2.6% from last year so additional work needs to be done before we start thinking about an export projection increase, but the recent activity has been impressive. Soybean oil sales were solid, as well, at 29.4k tonnes (8-40k expected) and followed sales the previous two weeks of 55.5k and 36.2k tonnes. With SBO sales only needing to average around 6.5k tonnes/week in order to reach the USDA’s projection, the recent sales pace has been impressive. Total commitments of 549k tonnes are now up an estimated 21% from last year vs USDA projecting a 12% decline in exports on the year so clearly an upward revision in the USDA’s estimate appears possible/likely in the February WASDE report.
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