October 10, 2008


US grain exports stood strong amidst crisis


US grain export sales were strong across the board last week, despite a widening financial crisis that is squeezing credit markets and fueling fears of a global recession.


Export sales were bolstered by futures prices at the Chicago Board of Trade (CBOT) falling more than 40 percent from record highs this summer and ocean freight hitting a 28-month low.


Joe Bedore, CBOT floor manager for trading house FC Stone said exports were good for everything and that's supportive, but the financial markets cannot be ignored.


Export sales of US wheat to be shipped in the current marketing year that began Sunday, 1 June 2008 totalled more than 500,000 tonnes last week, according to data from the US Agriculture Department released on Thursday morning.


Iran was the largest buyer with 64,400 tonnes, bringing its total purchases to nearly 1.4 million tonnes and making it one of the largest buyers of US wheat this year. Egypt was the second-largest buyer with 62,500 tonnes, marking the Egyptian government's first purchase of US wheat in its public tenders in nearly a month.


However, overall US wheat export sales are down about 30 percent from this time last year when buyers were looking at the lowest global wheat stocks in nearly 30 years. This year, USDA forecasts a record high for the global wheat crop and ample ending stocks.


Export sales of higher protein varieties such as durum and spring wheat have been hit hard as well.


Wheat futures at the Chicago Board of Trade have fallen 30 percent this year to around US $6 a bushel and are down more than 50 percent from their record high of more than US $13 in February.


Corn export sales have steadily climbed for the past four weeks, topping 950,000 tonnes last week and reaching an eight-week high. Japan, the largest buyer of US corn, took about 325,000 tonnes, followed by Mexico and Guatemala.


However, total corn export sales are down about 40 percent from this time last year.

US soy export sales were 600,000 tonnes and have ranged between 400,000 and 600,000 tonnes for the past month.


Soy export sales are running 4 percent head of last year's pace, mainly due to slightly higher buying by China, the largest US soy buyer.


Last week, China bought 168,800 tonnes, bringing its total purchases for the marketing year that started Monday, 1 September 2008 to 5.6 million tonnes.

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