-Soybean sales net cancellations (lower than expected)
-Corn sales as expected – better than “needed”
-Wheat sales lower than expected old crop – better than expected new crop
-SBM sales at lower end of expectations/SBO sales as expected
U.S. soybean sales, for the week ended 4/01/21, were net cancellations of 93k tonnes (3.4 million bushels) vs market expectations for sales of 100-400k tonnes, with China canceling 216k tonnes and the largest sales of the week being a mere 32k tonnes to Japan. Weeks of net cancellations are not uncommon in years of strong early sales on supply/price concerns and we will not be surprised to see additional cancellations down the road. Total commitments of 2.232 billion bushels are still up 63% from last year’s 1.374 billion, with sales needing to average a minor 2.5 million bushels/week during April-August to reach the USDA’s 2.250 billion bushel export projection. With the notably slowdown in sales activity of late, averaging 2.9 mil bu/week over the last four weeks, USDA is likely to hold the line on their export estimate in tomorrow’s WASDE report. New crop sales of 339k tonnes (12.4 mil bu) were above market expectations of 0-200k, with China buying 264k tonnes. Total new crop commitments of 206 million bushels compare to only 32 mil bu sold at this time last year.
U.S. corn sales of 757k tonnes (29.8 mil bu) were within market expectations of 500-900k tonnes, pushing total commitments to 2.617 billion bushels and further ahead of the USDA’s current 2.600 billion bushel export projection which clearly is in need of a solid upward revision in tomorrow’s WASDE report. Given the differences between Census Bureau and Export Sales data, sales on the books already allow for exports to exceed the USDA’s projection with 5 months to go in the marketing year. This week’s activity included new net sales to China of a minor 29k tonnes. We look for USDA to raise their export estimate by at least 100 million bushels tomorrow, while we’re 200 million higher in our balance sheet. China still has 14-16 MMT of corn to ship prior to the end of August, which will be key to watch in the months ahead regarding the end target on 20/21 exports. New crop sales were only 50k tonnes (50-300k expected) with new crop total commitments of 81 million bushels comparing to 93 million at this time last year.
Old crop wheat sales of 82k tonnes (3.0 mil bu) were below expectations of 100-500k tonnes and were a marketing year low, which isn’t surprising as 2020/21 winds down. Additionally, we estimate sales only need to average roughly 3.5-4.0 million bushels/week over the last 8 weeks of the year to reach the USDA’s 985 million bushel export projection so there are no immediate worries with this week’s poor sales. However, there were net cancellations by China last week of 57k tonnes (-63k white wheat, net positive sales of 3k HRS/3k SRW). Total commitments of 925 million bushels are up less than 1% from last year’s 920 million and with USDA estimating exports up 2% from last year, we look for no change in their estimate in tomorrow’s report. New crop sales were solid at 530k tonnes (19.5 mil bu) vs expectations of 50-200k, with China buying 260k tonnes (195k white, 65k HRW). Total new crop sales of 63 million bushels compare to 47 million at this time last year.
Soybean meal sales of 128k tonnes were at the lower end of market expectations of 100-250k tonnes, but still met the roughly 118k tonnes/week in sales we estimate is needed to reach the USDA’s export projection. Total commitments are up 1% from last year, in line with the USDA’s projected annual exports. Soybean oil sales were respectable at 15.7k tonnes, within expectations of 0-30k and the 2nd best of the last 10 weeks, which isn’t saying much since SBO sales have been running below 5k tonnes/week for the most part of late. Total commitments are now down 29% from last year vs USDA estimating exports down only 8% from last year so a further downward revision in their estimate is likely in tomorrow’s report.
