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Corn and soybean rows with grassy field road between them. Mark R Coons/iStock/GettyImages

Weekly Grain Movement – corn continues to struggle

Soybeans post another solid round of export inspection data; wheat treads water

USDA’s latest export inspection data, out a day later than normal due to Monday’s Columbus Day holiday, continued to show decent corn and wheat totals. Corn’s struggles continue, on the other hand.

“Corn remains the problem child of the export business so far,” according to Farm Futures senior grain market analyst Bryce Knorr. “Inspections last week were little changed, continuing to run at less than half the rate forecast by USDA last week. Even our regular customers are buying from Brazil as they wait for news about how much U.S. corn will be available – and with what quality.”

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Corn’s totals eased slightly from the prior week’s tally of 18.6 million bushels to finish with 18.5 million bushels for the week ending October 10. That was on the low end of trade estimates that ranged between 15 million and 27 million bushels and pushed the weekly rate needed to match USDA forecasts up to 39.4 million bushels. Year-to-date totals for the 2019/20 marketing year are only at 98 million bushels, trending well behind last year’s pace of 273 million bushels.

Mexico once again emerged as the No. 1 destination for corn export inspections last week, with 7.4 million bushels. Japan kicked in 5.5 million bushels, Honduras added 1.9 million bushels, and other destinations accounted for the remaining 3.8 million bushels.

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Soybean export inspections also eased slightly week-over-week, moving from 38.6 million bushels down to 35.1 million bushels. That was in the middle of trade estimates that ranged between 27 million and 45 million bushels, however, and was good enough to slightly reduce the weekly rate needed to match USDA forecasts, now at 34.1 million bushels. Year-to-date totals of 190 million bushels so far in 2019/20 are also staying 7.3% above last year’s pace of 177 million bushels.

“Soybean export inspections remain good, reaching USDA’s forecast for the 2019 crop,” Knorr says. “But that estimate came out the day before China and the U.S. ended their first serious trade talks since July with what appeared to be a deal to buy more U.S. farm products.”

Reports from China since then walked back that commitment and so far, there’s little hard evidence that China is aggressively buying, Knorr adds. Just 5 million bushels of previous purchases were inspected last week through Thursday, putting China third on the list of leading destinations.  USDA also announced the sale of 5.2 million bushels today under its daily reporting system for large purchases, but the destination was listed as “unknown.”

Last week, Egypt led all destinations for soybean export inspections, with 7.7 million bushels. Other leading destinations included Pakistan (5.1 million), China (5.0 million), Mexico (3.9 million), Japan (2.9 million) and Thailand (2.9 million).

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Wheat export inspections eased slightly from the prior week’s tally of 17.6 million bushels down to 17.0 million bushels last week. That was in the middle of trade estimates that ranged between 11 million and 22 million bushels, with the weekly rate needed to match USDA forecasts moving slightly higher, to 18.7 million bushels. Marketing year-to-date totals of 348 million bushels remain 21% higher than last year’s pace.

“Wheat inspections lagged the rate forecast by USDA a little, but the year-to-date total remains higher than forecast by USDA,” Knorr says. “China showed up on the list of wheat destinations, but like most customers took just a single cargo.”

Japan was the No. 1 destination for wheat export inspections last week, with 3.1 million bushels. Other top destinations included China (2.3 million), Mexico (2.0 million), Indonesia (2.0 million) and Taiwan (1.9 million).

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