April 29, 2011

 

US corn exports sales plunge to four-month low

 

 

Sales of US corn export dived last week to the year's lowest level and were far below trader expectations as foreign demand slowed amid near-record grain prices, USDA data showed on Thursday (Apr 28).

 

Combined old- and new-crop corn sales totalled 443,626 tonnes in the week ending April 21, below trader estimates ranging from 800,000 to 1.05 million tonnes and the lowest sales since the week ending December 30, 2010.

 

Top global corn importer Japan was the biggest buyer. However, its purchase of 244,600 tonnes of old-crop corn was the smallest in more than a month.

 

Corn sales have been capped in recent weeks by CBOT corn futures which hit a record of US$7.83-3/4 per bushel earlier this month amid the tightest corn stocks since the 1930s.

 

"We've been worrying about not seeing any rationing in corn demand and I think we might have seen some of that today," said a US grain trader.

 

Some traders expected corn export sales to rise on support from a weaker dollar, which makes US supplies more attractive to exporters.

 

"If we cannot sell corn with a weak dollar and cheap freight, we are obviously overpriced in the world market," said Karl Setzer, market analyst with MaxYield Cooperative.

 

The dollar index has declined against a basket of currencies in every session since April 19 and on Thursday fell to the lowest level since August 2008.

 

Meanwhile, corn futures also touched nearly a four-week low on Thursday as drier weather in parts of the Midwest allowed farmers to resume spring plantings.

 

"If we don't see corn exports pop up next week - with the dollar hitting multi-year lows and futures under pressure - then we will start to have some demand concerns creeping to the export sector," said Shawn McCambridge, analyst at Prudential Bache Commodities.

 

Soybean export sales of 199,212 tonnes (old and new crop) were the smallest in two weeks and below estimates ranging from 350,000 to 550,000 tonnes. Shipments were also lowest since September 2010.

 

China, which buys about 60% of global soybean exports, has been purchasing freshly harvested supplies from South America and bought its smallest quantity of US soy in five weeks.

 

Wheat exports totalled 418,158 tonnes, within estimates of 350,000 to 550,000 tonnes. The largest proportion of sales was destined for Nigeria, Peru and Venezuela.

 

But shipments of wheat lagged the pace during the same week last year by 5% heading into the last month of 2010/11 marketing year that ends of May 31.

 

"If we don't have a strong pace (of shipments) going into the last month of the crop year, we are going to fall short of USDA expectations, and that could add to ending stocks a little bit," McCambridge said.