Weekly Export Sales Remain Elevated
- Corn sales last week beat market expectations again at 103 million bushels, which is a new marketing year high.
- The largest sales this week went to Mexico at 41.7 million bushels, which were largely already known in the daily sales announcement last week.
- There were also new sales to China of 8.4 million bushels which were not in daily announcements.
- Soybean sales of 56.2 million bushels were at the upper end of market expectations.
- Sales to China were only 11 million bushels, but sales to “unknown'' were at least 23 million bushels.
- Wheat sales of 21.9 million bushels were the second largest of the last 10 weeks.
- Upland cotton sales of 115,600 running bales were down 60 percent from the previous week and 40 percent from the prior 4-week average.
FBN’s Take On What It Means: The pace of soybean sales remains solid, though it has slowed from the record levels to start the marketing year. China’s corn purchases now sit at nearly 11 million tonnes, well above USDA’s 7 million tonne forecast. The trade expects the agency will eventually need to adjust the projection higher, but the timing is uncertain. Export demand remains the main factor supporting grain prices.
USDA Attaché Report Sees China Importing 22 MMT of Corn
- The latest attaché report boosted its China corn import forecast from 7 million tonnes to 22 million.
- To date, China already has over 10 million tonnes of US corn on the books.
- Ukraine is China’s typical origin for corn imports; while that crop is smaller versus a year ago, the exporter still has surplus to ship corn to China.
- China’s calendar TRQ volume is 7.2 million tonnes - for 2020 and for 2021.
- The report indicated that China quietly has issued an additional 5 million tonnes of TRQ to be used through December.
- That would align with our expectations given that through September, China already had imported nearly 7 million tonnes of corn.
- China’s domestic stocks have been tightening for several crop years thanks to changes in their policies.
FBN’s Take On What It Means: This year, we are seeing the impacts of growing feed demand and tight corn stocks making the perfect storm for corn exporters. While the US currently is the direct benefactor, other origins like Ukraine and Canada benefit through higher prices on exports as well. We see Chinese demand remaining robust for many commodities in the coming months.
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