June 29, 2012

 

US corn sales down 23% on soaring prices

 

 

Analysts said after weekly USDA export sales data on Thursday (June 28) that amid a deepening drought kept pressure on export demand last week, US corn prices soared as sales fell 23%.

 

South American corn, meanwhile, continued to undercut demand for corn from the US, the world's top exporter, with prices at ports some US$40 per tonne below prices at US Gulf Coast ports, they said.

 

The sluggish pace of US sales and shipments of late has stirred speculation that the recently-lowered government export forecast is still overstated.

 

"We continue to see very light demand on corn, which has generated concerns and was behind USDA recent decline in their export projection," said Shawn McCambridge, grain analyst with Jefferies Bache.

 

"It would most likely support, if we remain at these high price levels, some additional declines going forward," he said, referring to the government's current 41.91-million-tonne full-season export projection.

 

Futures prices for corn to be harvested this autumn have jumped more than 25% in the past two weeks as scorching heat and little rainfall across the US Corn Belt diminished once-high yield hopes.

 

The run-up in prices may keep regular buyers from booking large new-crop purchases for the moment as they wait to see how well the drought-hit US crop fares during pollination over the next few weeks, analysts said.

 

Net export sales totalled 292,800 tonnes in the week ended June 21, 192,900 tonnes of that for shipment in current marketing year which ends August 31. Analysts polled by Reuters had expected sales of 300,000-500,000 tonnes.

 

Japan, the No. one importer of US corn, was the week's top buyer with 135,900 tonnes of old-crop purchases and 32,200 tonnes of new-crop purchases. Other significant buyers included Mexico and China.

 

Over the past four weeks, net sales averaged about 311,000 tonnes per week, compared with 677,000 tonnes on average over the same period last year, USDA data showed.

 

Export sales of US wheat fell sharply from the previous week's 15-month high and missed trade forecasts as buyers stepped to the side lines amid climbing prices and an advancing winter crop harvest in the northern hemisphere.

 

Net sales of all US wheat varieties totalled 324,500 tonnes, less than half of the prior week's 842,000-tonne tally and below expectations for 450,000-650,000 tonnes.

 

Benchmark US wheat prices on the Chicago Board of Trade are up nearly 20% over the past two weeks despite rising stocks of wheat as key suppliers in Europe and the Black Sea region begin harvesting grain.

 

Net soy export sales last week rose 36% to 793,100 tonnes, above forecasts for 500,000-700,000 tonnes, USDA said. China, the world's biggest soy importer, was the week's top buyer with 115,900 tonnes of purchases for 2011-12 shipment and 285,000 tonnes for 2012-13.