-Corn sales massive as USDA reflects Chinese purchases
-Soybean sales higher than expected
-Wheat sales at top of expectations
-SBM/SBO sales within expectations
As anticipated, USDA reported massive corn sales for the week ended 1/28/21 totaling 7.437 MMT (293 million bushels), which were within market expectations of 6.0-7.8 MMT, and included 5.860 MMT (231 mil bu) to China, as well as 506k to Japan, 421k to Mexico and 403k to unknown. China now officially has 17.7 MMT of U.S. corn on the books and is likely closer to 20-22 MMT when taking into account “unknown” sales. Total commitments surged to 2.209 billion bushels, reflecting 87% of the USDA’s 2.550 billion bushel export projection with 7 months remaining in the marketing year. USDA is needing to make a significant increase in their export projection in next Tuesday’s WASDE report, likely by a minimum of 200 million bushels, but it will be interesting to see just how aggressive they get.
U.S. soybean sales last week of 824k tonnes (30.3 mil bu) were above market expectations of 300-750k tonnes and continue to run as a simply unsustainable pace, averaging 35.8 million bushels/week over the last four weeks. With total commitments now at 2.155 billion bushels, 97% of the USDA’s 2.230 billion bushel export projection, soybean sales can only average roughly 3 million bushels/week over the next 7 months in order to not exceed the USDA’s annual estimate. However, there is no room in the balance sheet for a material increase in the export estimate so things are definitely going to get interesting. New net sales to China of 150k tonnes were reflected in this week’s data, while they did switch 455k tonnes from unknown. China’s unshipped purchases still on the books are down to only 2.95 MMT, but may be closer to 4.5-5.0 MMT taking into account unknown sales, as well. Nonetheless, the massive export program to China is nearing its end, as clearly is needed, as Brazilian new crop supplies slowly ramp up. USDA reported 528k tonnes in new crop sales to China this week, as well, with total sales of 633k tonnes. Total new crop commitments to all destinations already stand at 156 million bushels vs new crop sales at this time last year of only 11 million bushels.
U.S. wheat sales were quite respectable at 643k tonnes (23.6 mil bu), a 10-week high and at the top end of market expectations of 250-700k tonnes. China was a buyer of 134k tonnes last week (67k HRS, 65k white) and brings their total purchases of U.S. wheat to 2.7 MMT so far. Total commitments of 824 million bushels are up 5% from last year’s 781 million, vs USDA projecting a 2.1% increase in exports this year, leaving sales needing to average roughly 9 million bushels/week through the end of May in order to reach the USDA’s 985 million bushel export projection vs last year’s 12.3 million/week average from this point forward.
U.S. soybean meal sales of 301k tonnes were at the upper end of market expectations of 100-350k tonnes, continuing an impressive stretch in which sales have averaged 242k tonnes/week over the last 8 weeks vs the roughly 148k tonnes/week “needed” pace based on the USDA’s current export projection. Total commitments are still down 1% from last year, though, vs USDA estimating exports up 1% on the year, with last year’s sales from this point forward averaging 139k tonnes/week. U.S. soybean oil sales were routine at 10.5k tonnes (8-30 expected), while total commitments slipped to 3% below last year as a result of a large 53k tonne sales week last year. SBO sales will need to average roughly 18.5k tonnes/week (20.2k last year) from this point forward in order to reach the USDA’s export projection of an expected 3% year-over-year decline.
