November 21, 2013

 

Strong pace expected for US 2013-14 soy, corn exports

 

 

The USDA forecast 2013-14 marketing year exports at 31 million tonnes for corn and 37 million tonnes for soy, as shown in the September World Agricultural Supply and Demand Estimates (WASDE) report.

 

As of October 31, the USDA reported that cumulative corn export inspections for the marketing year that began on September 1 totalled 6.25 million tonnes. Cumulative inspections were 30% larger than those of last year and represented 17% of the current USDA projection for the year.

 

Cumulative export commitments-exports plus unshipped export sales, as of October 24 were reported at 20.5 million tonnes. Those commitments were 88% larger than commitments of a year earlier and represented 66% of the USDA projection for the year.

 

Compared to commitments of a year ago, commitments this year are 3.5 million tonnes larger for China, 3.2 million tonnes larger for Mexico, and 2.2 million tonnes larger for unknown destinations. Sales to China represent nearly 22% of the total sales, compared to only 8% last year.

 

As of October 31, the USDA reported that cumulative soy export inspections for the marketing year that began on September 1 totalled 9.2 million tonnes. Cumulative inspections were 9% smaller than those of last year and represented 25% of the current USDA projection for the year.

 

Cumulative export commitments-exports plus unshipped export sales- as of October 24, however, were reported at a whopping 32.3 million tonnes. Those commitments were 25% larger than commitments of a year earlier and represented 86% of the USDA projection for the year.

 

Compared to commitments of a year ago, commitments this year are 4.4 million tonnes larger for China and 1.4 million tonnes larger for unknown destinations. About 381,000 tonnes have been sold to Russia, compared to none last year. Sales to China represent 62% of the total sales compared to 61% last year.

 

Seasonal export shipment and sales patterns vary considerably from year to year. Over the 10 years from 2003-04 through 2012-13, for example, corn exports during the first quarter of the marketing year averaged 26% of the total for the year but ranged from 22-30%. The pattern of sales was even more varied. Cumulative export sales at the end of the first quarter of the marketing year averaged 49% of the total exports for the marketing year but ranged from 36-66%.

 

The soy exports during the first quarter of the marketing year averaged 36% of the total for the year but varied from 28-47%. As with corn, the pattern of sales was even more varied. Cumulative export sales at the end of the first quarter of the marketing year averaged 63% of the total exports for the marketing year, but ranged from 48-82%.

 

While the magnitude of export sales early in the marketing year is not generally a good predictor of marketing-year exports, cumulative sales so far this year are still unusually large relative to the USDA's September export forecast for the year.

 

As mentioned before, after the eighth week of the marketing year, corn sales this year equal 66% of the USDA projection. That equals the largest percentage experienced after the thirteenth week of the marketing year in the previous 10 years. Similarly, soy sales at the end of the eighth week represent 86% of the USDA projection for the year. That exceeds the largest percentage experienced after the thirteenth week of the marketing year in the previous 10 years.

 

With a very large corn crop, US corn exports may well exceed the current projection of 31 million tonnes. Larger exports would in turn result in smaller year-ending stocks than would otherwise occur but would probably not result in higher corn prices. Instead, large exports are likely dependent on corn prices remaining relatively low.

 

The story for soy is different. For soy exports to exceed the current projection of 37 million tonnes, the US crop may have to exceed the current forecast of 86 million tonnes because year-ending stocks are already projected to be small.