October and November are usually the busiest months for grain and oilseed exports in the United States. But the ports are not as busy as they were a year ago, reflective of large global supply, and US shippers face a big challenge if they are to meet annual export targets for 2017/18. The United States is by far the world's leading supplier of corn, wheat, and soyabeans combined, shipping 30 percent of global exports last year. Brazil came in second at 20 percent.
According to the US Department of Agriculture, soyabean, corn, and wheat inspections in the latest week combined for 3.3 million tonnes, the second-largest volume of the year behind the week ended Feb. 2. Since January 2012, the biggest corn-wheat-soya inspection week occurred last October with 4.2 million tonnes. This suggests that US ports potentially have the space to handle greater weekly volumes than have recently been observed, and that corn and wheat shipments are not being held back solely due to the focus on soyabeans at this time of year.
The soyabean and corn marketing years just began and the wheat year is not yet half over, but weekly export sales and port inspections are already somewhat lackluster relative to previous years. Although there have recently been some impressive weekly figures here and there, they might not shine as much when placed in the context of the full-year targets.
USDA projects that the United States will export 2.25 billion bushels (61.2 million tonnes) of soyabeans, some 1.85 billion bushels (47 million tonnes) of corn, and 975 million bushels (26.5 million tonnes) of wheat in 2017/18. The busiest weeks at US ports are almost always driven by soyabeans. Unlike wheat and corn, shipments of the oilseed are
typically confined to a season, which primarily lasts from October to February. According to USDA, soyabean export inspections in the week ended Oct. 19 totaled 2,562,444 tonnes (94.2 million bushels). This is the highest weekly total for the year and the eleventh-largest weekly total in at least five years.
Weekly soyabean inspections have blown past the range of analyst estimates for three weeks in a row now. But the numbers are not as strong compared with the last two years. The shortfall in Brazil's soyabean harvest a year ago drove more demand than usual to the United States, so it is unsurprising that this October, weekly inspections are averaging 23 percent lower than in October 2016.
But this month's inspection average is running 7 percent below that of October 2015. The 2015/16 soyabean marketing year was considered to have started out a bit "slow," and USDA trimmed the annual export target a couple times before the end of the 2015 calendar year. However, USDA predicts that US soyabean exports will rise 3.5 percent over last year's record campaign in the 2017/18 marketing year that began Sept. 1.
The good news is that year-to-date soyabean export sales are 4 percent larger than the same point in 2015. But they are more than 15 percent down from where they were in 2016, 2014 and 2013, as this year's lower prices and global abundance have allowed buyers to push off forward purchases. Total US corn inspections so far in 2017/18 are off 46 percent from the year-ago pace, which was abnormal given the supply shortage in Brazil. The current inspection total is very similar to 2015's level.
The 2015/16 corn marketing year started out notoriously slow in export sales. Total sales so far in the 2017/18 year, which began on Sept. 1, are 27 percent larger than at the same point in 2015. USDA's October estimates for full-year US corn shipments were an identical 1.85 billion bushels in 2015 and 2017. However, the agency's target fell 11 percent midway through 2015/16, only to be rescued toward the end by Brazil's drought-driven shortfall. USDA's latest projection has 2017/18 corn exports down 20 percent from last year's high-volume campaign, though the departure could expand under a favorable South American growing season.
Year-to-date inspections for wheat lag 2016's pace by 5 percent. Average weekly wheat inspections were the largest in four years during the first third of the marketing year that began on June 1. But so far in October, wheat inspections are averaging 25 percent less than in October 2016. Similarly, total 2017/18 wheat bookings to date started out ahead of the previous year's pace, but last month they slipped below the same period in 2016/17 and that gap has widened even further this month.
USDA projects that 2017/18 US wheat shipments will drop 8 percent on the year, but the competition may be tougher than originally anticipated. Wheat exports in top supplier Russia are running 16 percent larger in 2017/18 than the same period in 2016/17 - which was a record-setting effort for the Black Sea country - and domestic supplies remain plentiful following its enormous harvest. Top-five supplier Australia is still in the game, too. Despite poor weather slashing the wheat harvest by 40 percent from year ago, USDA and its Australian attach? predict exports to fall only 22 percent from last year's 23 million tonnes.