June 15, 2012

US corn forecast up despite lowest corn export sales

As the market shrugged off the USDA's weekly report showing corn net export sales at 92,109 tonnes for the week ended June 7, the lowest level since August 2011, July corn futures on the CBOT were up US$0.135/bushel to US$6.06/bushel Thursday (June 14) morning.

Specifically, weekly corn net export sales shrank 159,713 tonnes, or 63.4%, from the previous reported week.

The last time weekly corn net exports were this low was in the reporting week ended August 25, 2011, when numerous cancellations resulted in a negative export number of minus 320,899 tonnes.

The top countries the US sold corn to in the latest reported week were China at 64,679 tonnes, Taiwan at 32,265 tonnes, Colombia at 18,570 tonnes, Guatemala at 11,174 tonnes and Nicaragua at 10,641 tonnes.

There were 20,371 tonnes of cancellations from Japan, 1,908 tonnes from Mexico, 146 tonnes from Honduras, 62 tonnes from El Salvador, 47 tonnes from Malaysia and 43,131 tonnes from unknown destinations.

Weekly physical corn exports declined for the second week in a row as they fell 300,034 tonnes, or 40.9%, to 432,888 tonnes, the lowest level in almost two years as it was last this low in the reporting week ended September 2, 2010, when it was at 285,505 tonnes.

The top weekly physical export destinations were Mexico at 198,850 tonnes, Japan at 111,406 tonnes, China at 71,146 tonnes, Guatemala at 11,174 tonnes and Nicaragua at 10,641 tonnes.

Net sales are considered a more appropriate indicator for the strength of the corn export market, according to sources. The difference between weekly corn net export sales and weekly corn exports is timing, with corn first bought -- the weekly net export sales figure -- and then physically exported -- the weekly physical export figure.