October 22, 2010

 

US corn sales hit six-year low

US corn export sales plunged 82% last week to the lowest in more than six years, data showed Thursday (Oct 21), as traders said a price surge due to a government forecast of a smaller crop had deterred buyers.

 

But soy export sales hit a two-month high, nearly doubling from the previous week amid heavy sales to China, traders said after the USDA released its weekly export sales report.

 

US corn prices surged 16% in the days immediately after an October 8 USDA report pegged US corn output at 12.664 billion bushels and corn yields at 155.8 bushels per acre, well below trade expectations.

 

"The sales were putrid. The price was too high in the US, Brazil was doing a lot of business, and Canada's been selling feed wheat off the west coast," ABN AMRO analyst Charlie Sernatinger said.

 

"We've also got logistical problems off the Gulf Coast selling anything for spot," he added, referring to the lack of available nearby loading capacity due to heavy sales commitments already on the books this fall.

 

Net corn export sales in the week ended October 14 totalled 212,500 tonnes, the lowest combined-marketing-year sales in a single week since June 2004 and well below trade expectations for 400,000 to 600,000 tonnes.

 

Japan, the top market for US corn, was the biggest buyer in the week with 144,900 tonnes, while other traditional large importers such as Taiwan and Egypt bought only minimal amounts.

 

The USDA reported net reductions in sales to Mexico and South Korea, the top US corn importers behind Japan.

 

But despite the drop in sales for the week, corn sales of nearly 19.2 million tonnes in the marketing year to date were 13% ahead of a year ago, while new crop sales of more than 350,000 tonnes were the largest on record for the date.

 

The sales for the 2010/11 marketing year, which ends on August 31, came to 38% of the USDA's full-year export forecast of 50.8 million tonnes, also ahead of a year ago.

 

Meanwhile, soy export sales last week rose to the highest point since mid-August on active buying by China, which needs to buy at least one million tonnes on the global market every week to meet import projections.

 

Net soy export sales totalled 2.017 million tonnes in the week ended October 14, up 85% from the prior week.

 

China bought 1.451 million tonnes last week, more than 70% of the week's sales and the country's heaviest weekly purchases in 10 weeks, the USDA data showed.

 

Marketing year-to-date soy sales to all destinations totalled 25.35 million tonnes, 14% ahead of last year's pace and 61% of the USDA's full-year export forecast for 41.37 million tonnes.