December 12, 2008

Weekly export sales of US corn and soy surged last week (week ended Dec 4) as buyers pounced on low prices, but estimated sales for corn remain grim, data from the US Department of Agriculture show.

Higher sales were brought about by corn futures at the CBOT falling below US$3 per bushel for the first time in more than two years last week. As a result, US corn sales reached a nine-wek high of 928,658 tonnes for the current crop. Mexico bought more than half of all corn sold and its purchase of 586,200 tonnes was its largest in three months. Japan's purchase of 365,100 tonnes was its largest in two months.

While sales were strong last week, overall corn export sales since Sept 1 are down 48 percent from last year versus a forecast for sales to fall 26 percent.

Corn sales fell as buyers opt to purchase cheaper feed wheat. Sales to major importers such as South Korea, Taiwan and Egypt are down as much as 70 percent.

Still, sales are expected to rebound in 2009 once the supply of cheap feed wheat is depleted.

Soy futures fell below US$8 for the first time since August 2007.

Soy export sales were robust at a five-week high of 809,838 tonnes. China bought 636,300 tonnes, recording a fourth time in 2008 that its weekly purchase has exceeded 600,000 tonnes.

Chinese crushers have upped purchases of US soy, which are currently cheaper than domestic soybeans.

Total soy sales since Sept 1 dropped 4 percent from last year compared with a USDA forecast for sales to drop 10 percent. The pace of US soybean exports was expected to slow beginning in February or March when South America begins new crop exports.

Wheat sales put up a hard battle due to high prices. Total sales were 239,315 tonnes -- the third time in five weeks that sales have fallen below 300,000 tonnes.