U.S. corn and soybean exporters this month should be finishing up a record-setting season, and although recent export demand has been slower than some analysts had hoped, the progress is not too shabby when put in context with averages and expectations.
As of Aug. 19, some 19.3 million tonnes (759 million bushels) of U.S. corn had been sold for export in 2021-22, which starts on Sept. 1, according to the U.S. Department of Agriculture. That is easily the highest for the date in more than 15 years if not record-high.
Last year’s pace by the same date was also potentially a record at 13.2 million tonnes, and that was supported by strong sales to China, which had previously been uncommon.
China had 71% more new-crop U.S. corn booked as of Aug. 19 than a year earlier, though there has been no activity in that arena since May, and the 2021-22 total remains at 10.7 million tonnes.
China’s quietness in U.S. new-crop corn has increased confusion among market participants over the Asian country’s intentions, but USDA still believes 2021-22 imports will be unchanged on the year at 26 million tonnes.
When excluding sales to China in the new-crop corn total as of Aug. 19, the remaining 8.5 million tonnes is slightly above recent averages for the date and above year-ago levels. However, it is noticeably below the same points in 2016 and 2018. (https://tmsnrt.rs/3BfqN1f)
That is significant because those are years when Brazil’s corn crop failed, which rerouted business to the United States. Brazil’s crop fell well short of expectations this year, but it did not seem to drive extra U.S. sales, raising concern for the health of global corn demand.
USDA sees 2021-22 U.S. corn exports falling nearly 14% from the current year to 61 million tonnes (2.4 billion bushels), still a historically strong effort. New-crop bookings have recently increased from this summer’s slow pace, and that trend will have to continue in order to maintain expectations.
SOYBEANS
As of Aug. 19, U.S. soybean sales for export in 2021-22 stood at 15.6 million tonnes (574 million bushels), with 43% of that to China and 36% to unknown buyers. That is off last year’s high for the date of 22.2 million tonnes, and four other years within the past decade also had more sales by Aug. 19 than 2021.
New-crop soybean sales to destinations other than China and unknown were actually up 5% from a year ago as of Aug. 19 at 3.25 million tonnes. That appears to be the second-highest ever for the date, though well off 2018’s record, when the U.S.-China trade war put U.S. beans on sale to the rest of the world.
The slightly stronger pace in non-China, non-unknown sales than a year ago could be considered a win for exporters given the difference in price. On Aug. 19 this year, most-active CBOT soybean futures Sv1 ended at $13.20 per bushel, though a year earlier they had closed at $9.14.
As of Thursday, there were rumors around the market that China had bought several more U.S. soybean cargoes, which if true should soon be revealed in USDA’s daily sales reporting program.
Those daily sales have picked up recently, though the volumes are lower than what has been common this time of year. Since June, there have been 25 daily soybean sales to either China or unknown, most of them this month. That compares with 56 between June and August 2020.
USDA estimates 2021-22 U.S. soybean exports at 55.9 million tonnes (2.055 billion bushels), some 9% off this year’s record. Analysts have been concerned about slipping global soybean demand, especially with poor margins for both soybean processors and hog producers in China.
Top soy exporter Brazil is expected to step up its harvest this year, increasing competition with U.S. suppliers. Government agency Conab on Thursday pegged the upcoming soybean crop up 3.9% on the year to a record 141.3 million tonnes.
Brazilian farmers also hope to plant in a timely fashion, quicker than last year’s lagged pace, and if they are successful, those supplies could be available for export in late January.
Source: Reuters (Reporting by Karen Braun; Editing by Matthew Lewis)