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Weekly Export Sales – stronger totals than expected

China, Japan, Mexico and others step up purchases

The latest round of grain export data from USDA, out Thursday morning, showed mostly positive results after corn and soybeans logged a solid round of sales. Wheat bucked the trend after slowing by more than 50% from the prior week, however.

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“Export sales last week were even stronger than expected for both corn and soybeans,” according to Farm Futures senior grain market analyst Bryce Knorr. “A good total was anticipated for corn due to heavy buying from Mexico, but Japan also stepped forward with purchases ahead of the Sept. 12 USDA report. Soybean numbers appear to indicate China was buying as well before the series of announcement made under USDA’s daily reporting system for large purchases.”

But the market’s relative lack of reaction to the news reflects the overall slow start to the selling season for both crops, Knorr adds.

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“Corn commitments are at the lowest level in 15 years for mid-September, while the soybean pace is at a 10-year low,” he says. “The market will be watching trade talks in Washington that restarted today with meetings by lower level negotiators to see if any progress is made ahead of higher-level discussions set after Chinese holidays in the first week of October. China could do some buying as a goodwill gesture, though both sides still appear dug in.”

Corn found 57.7 million bushels in old crop sales plus another 2.6 million bushels in new crop sales for the week ending September 12, for a total of 60.2 million bushels. That tally roughly tripled the prior week’s total of 19.6 million bushels and moderately exceeded the average trade guess of 43.3 million bushels. The weekly rate needed to match USDA forecasts moved lower, to 31.9 million bushels.

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Corn export shipments were a much more modest 18.0 million bushels. Mexico by far leads all destinations for U.S. corn export commitments so far during the 2019/20 marketing year, with 55% of the total. Other leading destinations include Japan (12%), unknown destinations (9%), Guatemala (4%) and Panama (4%).

Soybean export sales also took a big leap forward last week, with 63.5 million bushels in total sales. That was well ahead of the prior week’s tally of 43.1 million bushels and nearly double trade estimates of 33.1 million bushels. The weekly rate needed to match USDA forecasts fell to 26.2 million bushels.

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 Soybean export shipments were for 25.8 million bushels. So far during the 2019/20 marketing year, unknown destinations takes the lead for U.S. soybean export commitments, accounting for 36% of the total. Other top destinations include Mexico (19%), China (15%), Taiwan (5%) and Japan (5%).

In light of surging corn and soybean export sales, wheat sales were a relative disappointment last week after notching just 10.5 million bushels. That was less than half of the prior week’s tally of 22.1 million bushels and moderately below trade estimates of 16.5 million bushels.

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“Wheat sales were disappointing today in a very fractured market that still has plenty of wheat,” Knorr says. “Black Sea exporters continue to dominate tenders by Egypt, with France maintaining business with its traditional North African trading partners as well. That leaves only crumbs for higher-priced U.S. wheat to pick up.”

Wheat export shipments fared better, with 18.8 million bushels. With the 2019/20 marketing year now more than a quarter complete, Mexico leads all destinations of U.S. wheat export commitments, with 15% of the total. Other top destinations include the Philippines (12%), Japan (9%), Nigeria (6%) and South Korea (6%).

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