US soy exports could top forecasts, but corn outlook doubtful

FORT COLLINS: With just eight weeks left in the current marketing year, US soybean exports could be on pace to top government forecasts, but corn may have a tougher time meeting the expectations.

Data published on Wednesday by the US Census Bureau showed that May corn reached 4.7 million tonnes, the smallest for that month in six years.

Total corn exports since the 2018-19 marketing year began on Sept. 1 were up 4% on the year at 43.6 million tonnes by the end of May, down 10 percentage points from the September-April margin.

This reflects the slowing interest in US corn as South American supplies have rebounded substantially from last year's weather troubles. US corn exports have also suffered from logistical problems that began in March as excess rainfall has routinely closed or reduced river traffic.

The US Department of Agriculture pegs 2018-19 US corn exports at 2.2 billion bushels (55.9 million tonnes), and meeting this target requires a decent amount of sales in the coming weeks, which could be tough given abundant supplies overseas.

Through June 20, US corn commitments totaled 48.7 million tonnes, some 7.2 million shy of the full-year target. Outstanding sales, meaning those left to ship, stood at 6.1 million tonnes on that date. Analysts expect that no more than 400,000 tonnes of corn were sold in the week ended June 27, and that data will be out on Friday morning.

In the final three months of 2018-19, corn exports must average 4.1 million tonnes to meet USDA's current forecast, well below the recent average for that time frame, but that is assuming the necessary sales are made and that logistical issues improve.

June volumes have been poor. Weekly export inspection data implies that last month's shipments totaled about 2.5 million tonnes through June 27. The 272,513 tonnes of corn inspected in the week ended June 27 were the smallest for any week in nearly six years.

In May, the United States shipped 2.56 tonnes of soybeans, down 18% from last year's high for the month but the second-highest May volume on record. September-through-May shipments totaled 35.8 million tonnes, down 26% on the year and the smallest volume for the period in six years.

Some 50% of the May soybean shipments were to China, the largest monthly share since January 2018. Exports to the top soybean buyer reached 1.28 million tonnes in May, and shipments in the first nine months of the marketing year totaled 6.98 million tonnes, down 75% on the year, initiated by the trade war between the two countries.

Soybean shipments to non-China destinations are slowing down after a record-setting surge that started a year ago. The 1.28 million tonnes shipped in May to buyers other than China were the smallest monthly volume in two years.

USDA's full-year forecast for 2018-19 soybean exports is 1.7 billion bushels (46.3 million tonnes), down 20% on the year and the smallest total in five years. This means exports from June through August must average 3.5 million tonnes per month, a record pace.

But there are plenty of sales left on the book to help surpass that mark, and a lot of this will ride on China as just over half of those sales are to the Asian country. Through June 20, there were about 8.4 million tonnes of soybeans left to ship before Aug. 31 to meet USDA's target, but outstanding sales stood at 10.5 million.

Traders have been fearful for months that China would cancel soybean cargoes as shipments have been slow ever since the purchases were made, largely between December and February. Trade relations have seemingly warmed in recent weeks, and the talks may continue face-to-face as early as next week.

Reduced feed demand due to rampant African swine fever in China has also been a concern related to possible cancellations, but shipments have continued. In the four weeks ended June 27, some 1.6 million tonnes of beans were inspected for export to China.