November 19, 2010

 

US wheat sales reach 10-week high

US wheat export sales climbed for the fifth consecutive week last week and hit a 10-week peak on improving demand for US supplies after weather woes cut crops in parts of Europe and the Black Sea region this year, trade sources said Thursday (Nov18).

 

Soy export sales rose 26% and topped one million tonnes for the seventh time in nine weeks amid continued strong sales to China, the world's top importer, the sources said after the USDA released its weekly export sales report.

 

Corn sales, however, were near the low end of a range of trade forecasts as elevated prices and competition from larger global supplies of feed-quality wheat dragged on demand.

 

"Wheat sales beat expectations by a good 50%. I think this is continued fallout from the European situation and generally a reflection of improving demand," said Sterling Smith, analyst with Country Hedging.

 

US wheat exports were expected to assume a leading role in the global market in the months ahead amid dwindling supplies in Europe. Traders expect most of France's and Britain's exportable surplus to be used up by the end of December.

 

Meanwhile, a Russian ban on grain exports through next July following a severe drought this summer which slashed the country's crop by more than 30% will continue to support demand for US wheat.

 

Net export sales of all US wheat totalled 986,900 tonnes in the week ended November 11, above trade expectations for 400,000 to 600,000 tonnes. That included 43,500 tonnes in sales for shipment in the 2011/12 marketing year, which begins June 1.

 

The top buyers were Mexico, Egypt, Iraq, Nigeria and Japan, all regular US wheat buyers. USDA also reported large sales to "unknown" destinations, which exporters are not required to disclose until the grain is loading.

 

US soy export sales rebounded last week from the prior week's two-month low on persistent demand from China, the world's major soy importer.

 

USDA said net sales in the week ended last Thursday (Nov18) reached 1.175 million tonnes, including 168,000 tonnes of new-crop sales for shipment in the September 2011-August 2012 marketing year.

 

According to USDA data, China bought 829,800 tonnes of old-crop supplies and 118,000 tonnes of new-crop soy, the country's largest weekly total in three weeks.

 

US 2010/11 soy export sales to all destinations were 19% ahead of the previous year, compared with the latest USDA forecast for a 4.6% increase in exports on-year.

 

Net corn export sales last week totalled 533,700 tonnes, down 15% from the previous week as Japan, by far the largest importer of US corn, bought its smallest volume in two months, USDA data showed. Sales to South Korea were the largest in a single week in 6-1/2 months.