Markets Mostly Steady Going Into Open Harvest Weekend
International Grains Council forecast world grains stocks to be at a 3-year high
Export Sales Announcement
- Private exporters reported to the U.S. Department of Agriculture export sales of 100,000 metric tons of soybean meal for delivery to unknown destinations during the 2020/2021 marketing year.
- Huge Weekly Corn and Soy Export Sales
Soybean sales for the week ended September 17 were 117.4 million bushels, beating already elevated market expectations.
- Weekly sales only need to average roughly 17.5 million bushels per week in order to reach the USDA's 2,125 million bushel export projection.
- Corn sales were also very strong at 84.2 million bushels, well above trade estimates.
- To reach the USDA's 2,325 million bushel export projection, corn sales will need to average roughly 28.5 million bushels per week.
- Wheat sales for the week were routine at 12.9 million bushels.
- Upland cotton sales of 92,700 running bales were down 82% from the previous week and 60% from the prior 4-week average.
FBN’s Take On What It Means: Given the extremely strong pace of sales already, exporters need to just equal last year's weekly volumes of corn and wheat to meet forecasts. Chinese buying is expected to slow down based on their huge purchases already. There were no daily export sales announced Thursday and activity could be quiet as China is on holiday for the first week of October.
IGC Forecast Grain Stocks higher
- The International Grains Council forecast world grains stocks to be at a 3-year high of 629 million tonnes, up from 622 million last year.
- The council reduced its global corn crop forecast by 6 million tonnes to a still record high of 1.16 billion tonnes.
- US corn production was forecast at 376.5 million tonnes, down from 384.2 million projected last month.
- Global corn consumption in 2020/21 was seen at 1.176 billion tonnes, up from 1.145 billion in the previous year.
- The IGC maintained its forecast for world wheat production at a record 763 million tonnes with consumption at 749 million tonnes.
- The soybean production forecast was kept at 373 million tonnes with consumption of 369 million.
FBN’s Take On What It Means: The decrease in corn production is in line with the USDA after the agency lowered its forecast in the September WASDE report. Corn ending stocks are expected to be lower for the fourth consecutive year, but the decrease is more than offset by expansions for wheat, barley and other grains. Even though global demand continues to increase, this will serve to hinder the chance for a larger increase in world prices.
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