12/30/2021
The old-crop corn sales were nearly twice the pace we'd normally expect right ahead of Christmas, while the soybean sales fell short of typical levels, as shown in the graphic below. Soybean shipments have been seasonally strong, but the concern is whether we can sustain the pace. Soybean harvest in Mato Grosso began yesterday; about 20 days earlier than last year's start. Those early soybeans will take several days to make the trip to the port, where additional time will be needed to inspect, certify and load them onto boats to make the 45-day trip to China. That puts them in the ports in China in the last half of February. That means U.S. exporters in the Gulf - 32 days from China - have a few more weeks to load soybeans to fill the gap ahead of the arrival of cheaper Brazilian soybeans. U.S. soybeans loaded at the Gulf in February are running 80 - 85 cents higher than Brazilian soybeans loaded in February relative to their value landed at the port in China. Those loaded in the Pacific Northwest are even more expensive.
Corn Values trading double digits lower today once again on a less than high volume session. Export sales better than the expected range ahead of the report but still leaving that lag in commitments significant. With 1.25 mmt sold as of last Thursday the US now has a 2.8 mmt shortfall in commitments to last year for which the USDA expects a 6.4 mmt YoY decline. At the current rate of exports and commitment, the US is set to make the USDA’s forecast. The export sales report did show that China purchased .073 mmt of corn as of last Thursday which brought its commitments up to 12.29 mmt which is .7 mmt ahead of the level of commitments on the books to China a year ago. Shipments continue to lag significantly with only 18% of the commitments shipped vs 41% a year ago. FOB values put the US at a disadvantage to Ukraine.
