-Soybean sales at very bottom of market expectations
-Corn sales near bottom of market expectations
-Wheat sales within expectations
-SBM sales in lower portion of expectations/SBO sales above expectations
NOTE: There will not be a CBOT Morning Comment today. The EIA’s weekly ethanol data will be out at 10:00 AM CT today. CFTC COT data will not be released until Monday.
U.S. soybean sales, for the week ended 12/19/19, were a 3-week low and the 2nd lowest of last nine week at 736k tonnes (27.1 million bushels), falling at the very bottom of market expectations of 700k-1.5 MMT and down from the previous week’s 52.6 million bushels and sharply below last year’s same-week sales of 87.9 mil bu. This week’s sales included new net purchases by China of 334k tonnes, bringing their total purchases to 10.9 MMT vs 3.5 MMT at this time last year. However, with a considerable fall-off in sales to non-Chinese destinations relative to last year, total commitments of 1.072 billion bushels are slightly below those of last year at this time of 1.100 billion bushels. We estimate soybean sales will need to average roughly 20 million bushels/week over the remainder of 2019/20 in order to reach the USDA’s 1.775 billion bushels export projection vs last year’s 19.2 million/week average from this point forward.
U.S. corn sales last week of 625k tonnes (24.6 mil bu) were at the bottom end of market expectations of 500k-1.2 MMT, declining considerably from the previous week’s marketing year high 67.3 mil bu and were the 2nd lowest of the last six weeks. Additionally, sales were sharply below last year’s same-week sales of 66.9 mil bu. The largest sales this week were just 236k tonnes of Mexico. Total commitments of 702 million bushels are down 43% from last year’s 1.233 billion bushels vs USDA estimating 2019/20 exports to decline just 10% from last year. The 2nd half sales program is going to need to be a strong one if the USDA’s export projection is to be met as sales of roughly 30 million bushes/week are required vs last year’s 20.4 mil bu/week average from this point forward. The typical sharp seasonal drop-off in Brazilian exports during Feb-July is near, while Argentina also notably raised export taxes on corn so the time is approaching to see whether U.S. sales will start to pick up enough to offer a glimmer of hope to reaching the USDA’s export target.
U.S. wheat sales last week of 715k tonnes (26.3 mil bu) were within market expectations of 200-900k tonnes, but were quite solid at the 2nd highest of 2019/20 so far, only coming in below the previous week’s yearly high of 31.9 mil bu. Total commitments of 681 mil bu are up 8% from last year vs the USDA estimating 2019/20 exports up 4% on the year. With sales over the last six weeks averaging 20.6 mil bu/week vs the average “needed” sales pace of roughly 12 million bushels/week, USDA may be prompted to bump their export projection a bit higher in the January WASDE report. Sales from this point forward last year averaged 13.8 mil bu/week.
U.S. soybean meal sales last week of 138k tonnes were at the bottom of market expectations of 100-300k tonnes, but were only slightly below the roughly 156k tonnes/week “needed” pace in order to reach the USDA’s annual export target. SBM sales over the last six weeks averaged 155k tonnes/week, in line with the needed pace, but total commitments of 5.444 MMT are down 19% from last year vs USDA estimating just a 3% decline in exports on the year. SBM sales from this point forward last year averaged 138k tonnes/week. Soybean oil sales were solid at 37.4k tonnes, beating market expectations of 5-30k tonnes and continuing a stretch of rather strong sales over the last 7 weeks averaging 27.2k tonnes/week. SBO sales only need to average roughly 9k tonnes/week in order to reach the USDA’s export projection vs last year’s 13.5k/week average from this point forward last year. Total commitments of 428k tonnes are now up 10.3% from last year vs USDA estimating a 12.4% decline on the year.
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