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Weekly Grain Movement – Soybeans stay strong

Corn and wheat continue to slump

For the week ending October 31, soybean export inspections remain relatively strong as buyers from several countries continue to take delivery. But corn and wheat posted another round of lackluster results last week.

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Soybean export inspections topped 54.4 million bushels, which was slightly below the prior week’s tally of 58.0 million bushels but on the high end of trade guesses that ranged between 31 million and 55 million bushels. The weekly rate needed to match USDA forecasts dropped to 34.1 million bushels, while cumulative totals for the 2019/20 marketing year moved nearly 11% higher than a year ago, with 351 million bushels.

“China continues to dominate U.S. soybean exports, taking a little over half the weekly total,” according to Farm Futures senior grain market analyst Bryce Knorr. “Buyers from other countries are also taking delivery, which helped fuel a surge in basis last week.”

Can the current pace continue? Inspections normally begin tailing off in November, Knorr notes.

“Additional purchases by China will be needed to extend the selling season into the window, when demand begins to shift to South America,” he says. “If that happens, demand could be a little better than USDA currently forecasts.”

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Corn business continues to disappoint, in contrast. Last week only gathered another 10.9 million bushels, falling from the prior week’s already lackluster 15.4 million bushels and slumping below the average trade guess that ranged between 17 million and 25 million bushels. The weekly rate needed to match USDA forecasts moved up to 36.5 million bushels, and 2019/20 running totals of 148 million bushels is down 62% from a year ago.

“Basis was strong in the export pipeline, lifting bids to option or better along the Illinois River,” Knorr says. “But that strength came from the slow pace of harvest and falling barge freight costs, not demand.”

Mexico accounted for more than half of U.S. corn export inspections last week, with 6.7 million bushels. Colombia added another 1.0 million bushels, with other destinations filling out the final 3.1 million bushels.

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Wheat also posted lackluster results, with 10.8 million bushels. That was almost half of the prior week’s tally of 20.5 million bushels and moderately below the average trade guess, which ranged between 16 million and 25 million bushels. The weekly rate needed to match USDA forecasts moved up to 18.3 million bushels. Cumulative totals of 402 million bushels this marketing year are still trending 22% higher than a year ago, however.

“Wheat business slowed with demand for soft red winter wheat remaining poor,”
 Knorr says. “This week’s inspections were a low for the marketing year, coming at a time of year business shipments are typically weak. Most customers continue to ship out small volumes, suggesting they still aren’t worried about supplies around the world.”

Japan was the No. 1 destination for U.S. wheat export inspections last week, with 3.1 million bushels. Other top destinations included South Korea (2.3 million), Nigeria (1.8 million) and Taiwan (1.2 million).

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