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Fourth Quarter Grain Inspections Below 2018

Inspections of China-bound soybeans accounted for over 45% of total US soybean inspections

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According to USDA’s Federal Grain Inspection Service (FGIS), fourth-quarter inspections of grain (wheat, corn, and soybeans) shipped from major US ports in 2019 reached 30 million metric tons (mmt) (fig. 1). Fourth-quarter grain inspections were 9% below the same period in 2018 and 25% below the 5-year average. Soybean exports rebounded from 2018, with China importing a major share of US soybean exports. Wheat inspections continued to increase during the fourth quarter as a result of low supplies in Russia and other competing countries, but inspections of corn decreased significantly from 2018. Transportation demand during the fourth quarter started to recover from the late harvest but was not as strong as usual during this period.

Grain Inspections Figure 1Fourth-quarter grain inspections in the US Gulf reached 16.9 mmt, down 9% from the same time in 2018 and 27% below the 5-year average (see fig. 1). Marking the second-lowest levels recorded since 1995, US Gulf corn inspections dropped 44% from 2018, partly because of farmers’ reluctance to sell their corn at low prices, and partly because of weather-related delays during harvest. Soybean inspections in the US Gulf increased 19% from 2018, mainly owing to a rebound in shipments to Asia. Wheat inspections in the US Gulf were down 15% during the quarter. Fourth-quarter rail deliveries of grain to US Gulf ports increased slightly from 2018, and barge grain movements on the Mississippi River to the US Gulf increased more than 5%. Fourth-quarter ocean freight rates for shipping grain through the Gulf were down slightly from the third quarter of 2019 and the fourth quarter of 2018, as vessel activity slowed.

Pacific Northwest (PNW) grain inspections decreased 10% to 7.8 mmt during the fourth quarter and were 30% below the 5-year average. Fourth-quarter PNW corn inspections decreased 97% to .131 mmt from the same period in 2018. This marked the lowest decrease on record for corn—a drop precipitated by increased export competition and slowed demand for corn in response to low corn prices. In contrast, PNW soybean inspections rebounded, increasing 326%, as shipments to China and other Asian destinations increased from 2018. PNW fourth-quarter wheat inspections reached 3.5. mmt, up slightly from 2018. Fourth-quarter rail deliveries of grain to PNW ports were down 6% from 2018. Also, PNW ocean freight rates were below 2018 because of low vessel activity during the holiday.

Grain inspections in the Atlantic-Great Lakes region reached 1.4 mmt, up 12% from fourthquarter 2018 inspections but 35% below the 5-year average. Corn inspections in the region decreased from 2018 mainly because of less demand from Africa and Canada, while soybean inspections in the region dropped primarily because of lower shipments to Europe and Asia. Wheat inspections increased 61% from 2018 because of more shipments to Latin America and Europe. Interior grain inspections reached a record 4.5 mmt, up 11% from 2018 and 22% above the 5-year average.

Interior wheat inspections increased 36% as shipments to Mexico increased. Interior inspections of corn were up 7% from 2018, but soybean inspections increased 10% for the same period.

Soybean and Wheat Inspections Up; Corn Down Significantly

Fourth-quarter soybean inspections increased 29%from 2018, as Chinese imports increased substantially and other importers increased purchases (fig. 2). Inspections of China-bound soybeans accounted for over 45% of total US soybean inspections and over 6% of US soybeans destined to Asia.

US Gulf soybean inspections increased 19% from 2018 to 11.3 mmt, but were 27% below average. Fourth-quarter PNW soybean inspections totaled 4.1 mmt, up significantly as shipments to Asia rebounded. Fourth quarter Atlantic-Great Lakes soybean inspections totaled .364 mmt, down 37% from 2018 and 77% below the 5-year average. Interior soybean inspections reached 1.8 mmt, up 10% from last year and 11% above the 5-year average. According to USDA’s World Agricultural Supply and Demand Estimates (WASDE) report, the December projection for U.S. soybean exports for the 2019/20 marketing year is up 2% from 2018/19.

Grain Inspections Figure2Total US corn exports are projected to decrease 10% for the 2019/20 marketing year, according to WASDE, which is affecting inspections in most regions. For example, exceptionally low fourth-quarter corn inspections dropped 52% from the same period in 2018 and were 31% below the 5- year average (fig. 2). PNW corn inspections were down notably from 2018. US Gulf corn inspections reached 4.2 mmt, down 44% from 2018 and 31% below the 5-year average. Atlantic-Great Lakes corn inspections reached .014 mmt, down 59% from 2018 and the lowest since 2012. Fourth-quarter interior corn inspections totaled 2.2 mmt, up moderately from 2018.

Total US wheat inspections are projected to increase 4%for the 2019/20 marketing year, which, as in the case of corn, is affecting inspections in most regions. Fourth-quarter wheat inspections reached 6 mmt, up 4% from 2018 and 16% above the 5-year average (see fig. 2). Gulf wheat inspections reached 1.4 mmt, down 15% from 2018 and 19% below average. PNW wheat inspections reached 3.5 mmt, up 2% from 2018 and 40% above the 5-year average.

Fourth-quarter Atlantic-Great Lakes wheat inspections increased .992 mmt, up 61% from 2018 and the highest since 2007. Interior wheat inspections totaled .491 mmt, up 36% from the same period in 2018. The December WASDE estimates report projects total US wheat exports to increase 2% for the 2019/20 marketing year.

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