October 18, 2010

USDA reports show increase in grain exports

The USDA's weekly export figures show a 49% increase in corn exports from the previous week and a 35% increase from the previous monthly average.

Prime US corn customers were Mexico, Japan, South Korea, and Egypt. International corn markets have tightened in recent weeks because of drought-related shortages of export corn from Russia and the Ukraine, both of which have embargoed exports because of short crops.

Soy exports were up 17% last week from the previous week on continued strong buying by China.

For the export year, US corn exports are up 24%, according to the USDA. Soy exports are up 5% from last year's record totals.

Strong export demand is a factor in the 60% rise in the price of corn and 33% rise in soy since early June.

The soy contract for November delivery reached US$12 overnight for a time, then dropped back to US$11.98 before closing, up US$0.09 per bushel.

The US$12 price is the highest in two years. Iowa is the nation's largest soy producer and a US$12 price would put about US$6 billion in cash into the state's economy.

Soy prices have risen about 33% since June on continued strong demand from China. Worldwide supplies of soy, meal, and oils are tight despite big crops in both the US and Brazil.

In Iowa, the soy crop is expected to come in at about 55 bushels per acre this fall, according to the USDA. Despite earlier worries about Sudden Death Syndrome and water damage, the soy crop appears to have sustained less damage from the heavy summer rains than the corn crop.

Corn continues to trade strongly, with the December contract up US$0.026 per bushel overnight to US$5.70. Corn prices have risen more than 60% since June on news of a nearly 4% drop in the US crop and strong demand for exports and biofuels production.