Highlights

US corn exports to be down 18 percent in 2008-09 US soy exports to be down 13 percent in 2008-09 US soy exports up 11.5 percent from year-ago

September 10, 2008

 

US corn and soy exports in 2008-09 to decline from record volumes

Early USDA forecasts for the 2008-09 corn and soy marketing year project substantial declines in US exports from the record levels reached in the 2007-08 marketing year. 

     

The slowdown is already beginning. As of August 28, the USDA reported that 359 million bushels of US corn had been sold for export during the 2008-09 marketing year, nearly 30 percent less than sales at the same time last year.

 

For the 2008-09 marketing year, the USDA projects US corn exports at 2 billion bushels, or nearly 18 percent below exports of the year just ended.

 

The USDA currently projects US corn exports for the marketing year that just ended on August 31, 2008, at 2.425 billion bushels.

 

International demand for US corn is expected to slide as corn production outside the US ramps up, with some reaching record levels in 2008-09.

 

Foreign wheat production is nearly 9 percent larger than the 2007-08 crops while feed use of wheat outside the US is up nearly 17 million tonnes compared to last year. More producers, especially those in the EU, are relying on cheaper wheat to replace costly corn for animal feeds.

 

Although the EU does not import meaningful volumes of corn from the US, the decline in import demand means corn from countries where the EU used to source from would be made available to the world market, according to agricultural economist Darrel Good.

 

Coarse grain production outside the US in 2008-09 is expected to be nearly 5 percent larger than production in 2007-08, with most of that increase concentrated on corn

 

Major producers such as South Africa and Ukraine also had increased corn harvests this year and are likely to expand exports in 2008-09.

 

The US dollar, which is strengthening, could also reverse the trend of rising US grain exports, which up until now has been supported by a weak dollar.

 

However, Good dismissed the connection, saying there is only a weak statistical relationship between the value of the US dollar and US corn export volume.

 

Instead, Good said a global economic slowdown could slow the rate of increase in world meat demand and thus reduce demand.

 

Soy
 

For the year ended August 31, 2008, the USDA expects US soy exports to have totaled a record 1.145 billion bushels.

 

For the 2008-09 marketing year, the USDA projects US soy exports at one billion bushels, or nearly 13 percent less than was exported during the year just ended.

 

Larger exports from Argentina and Brazil and a slower rate of increase of imports from China, the largest soy importer, due to a larger harvest were cited as reasons for lower US soy exports.

 

US soy exports, at 279 billion bushels, was an increase of 11.5 percent from a year ago, based on USDA figures through August 28. US soy exports benefited from the closure of Argentinean soy exports for the past few months due to farm strikes.