Export Sales Positive for Beans, Neutral for Corn, Wheat
Old-crop corn sales totaled 15 million bushels, which was a surprise, especially given the timing; but new-crop sales at 24 million bushels were within expectations.
New-crop corn commitments are at 712 million bushels, which is the largest volume for this time period in at least the past decade.
Old crop bean sales were slim at 3.6 million bushels but new-crop sales came in at a large 41 million; that topped the high end of trade expectations.
China’s buying has picked up the past two weeks with lots of daily sales floating for China and unknown destinations (largely China).
USDA cut 1 million tonnes from China’s new-crop bean imports, but the total at 101 million is far from a bearish element despite weak hog/crush margins.
Wheat sales were routine at 11 million bushels; commitments are running behind USDA’s export pace and we remain less optimistic about export prospects for two key reasons: supply availability and uncompetitiveness.
FBN’s Take On What It Means: Export sales were overall a plus this week signaling no big pull back yet in demand despite rising prices. China’s appetite is picking up and is expected to remain focused on U.S. beans for the coming few months.
USDA’s Monthly Reports Recap
USDA’s reports were overall supportive with wheat and corn futures the big winners for the day.
Global production of corn, soybeans, wheat, barley, rapeseed, and oats was cut versus a month ago by the agency.
USDA’s initial US corn yield fell shy of trade expectations, prompting strength in that market; we leaned towards higher new crop exports for the US.
Canada and Russia had large wheat production cuts, which was not surprising, but USDA also cut global use some, holding US export prospects.
North American durum, HRS, and white wheat supplies will be tight.
Canada and US are uncompetitive versus other origins for wheat exports.
USDA cut Brazil’s old crop corn production but sees larger crops coming in the Southern Hemisphere. Bean planting will start in September for Brazil.
We see larger US export opportunities for 2021/22 versus USDA’s outlook.
Global barley stocks are set to be the tightest in years.
FBN’s Take On What It Means: USDA’s plethora of reports shot most markets higher. Substantial weakness in prices in the coming months would be a surprise. Small grain supplies in North America will be tight this year with pullbacks in demand, especially for exports, likely.
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