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Export Sales Disappoint

Export sales disappointed this week with corn and soybeans both booking well below analyst expectations.

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The grains are mixed this morning with corn down ½ a cent, soybeans unchanged and wheat up 5 ¾ cents going into this morning’s pause in trade activity. Continued dryness in the U.S. wheat belt is providing reasons for continued wheat short covering after prices fell to new lows last Friday. The forecast expects some beneficial rains for the plains wheat crop next week. The U.S. Dollar is trading off yesterday’s highs after briefly trading over the 100 mark in the overnight.

Export sales didn't provide much support for the grains with corn and soybeans missing analyst expectations to the low side. Wheat sales were stronger than expected booking 445,000 metric tons compared to 300,000-450,000 metric tons expected. Large purchases from China, Mexico, unknown destinations and the Philippines helped maintain export sales in the face of a rapidly rising dollar. Corn sales fell to 418,000 metric tons of old crop sales, down 50 percent from the previous week and well below analyst expectations of between 600,000-800,000 metric tons. Soybeans also disappointed analysts by booking only 167,900 metric tons this week compared to 300,000-500,000 metric tons expected by analysts. Soybean sales are expected to come under pressure during the second half of the marketing year with 98 percent of expected sales already booked. The USDA left soybean export sales unchanged in the latest WASDE report.

On Wednesday, most Argentinian farmers halted grain sales in protest to bring attention to existing agricultural policies. The strike is expected to be limited to three days and will most likely not affect the loading at port facilities.

Ethanol production increased week over week by 13,000 barrels per day to 944,000 barrels per day which is still well over last year’s production pace. In the latest WASDE report released on Tuesday the 10th the USDA cut ethanol production by 50 million bushels. The USDA cited that the new Grain Crushing’s and Co-Products Production report showed corn used for ethanol between October and January occurred at a higher conversion rate than previously assumed.

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