November 1, 2004
MONITORING CORN AND SOYBEAN EXPORTS
As the 2004 corn and soybean harvest is
concluded, the markets will focus on the availability of storage
and the rate of selling by producers. Assuming the November
USDA Crop Production report confirms the current projections
of crop size, however, the rate of use of the crops will become
top priority for price direction.
The demand focus will tend to be on exports for two reasons.
First, there is more uncertainty about the magnitude of exports
than the magnitude of domestic use for the year and second,
weekly USDA export data are available for the market to digest.
The weekly Export Inspections report, released on Monday morning,
reveals the amount of crop inspected for export during the
previous week, ending on Thursday. The report allows the market
to monitor the rate of inspections in relation to the USDA's
projection of exports for the year and in relation to the
rate of inspections in previous years. Weekly inspection figures
are frequently revised in the following weekly report. The
revisions are almost always higher than the initial estimates.
The weekly Export Sales report, released on Thursday morning,
reveals the amount of crop exported and the magnitude of new
sales during the week ended on the previous Thursday. This
report allows the market to monitor the rate of shipments
and the rate of commercial export sales by destination. Again,
the weekly report provides for an evaluation of actual export
business in relation to the level of exports projected for
The USDA also has a daily export reporting system and requires
exporters to report sales of 100,000 tons or more to a single
buyer. The Census Bureau reports exports by commodity on a
monthly basis, typically about 6 weeks after the end of the
month. The Census Bureau estimates are official and are reflected
in the USDA's supply and demand balance sheets for previous
The corn and soybean marketing year begins on September 1,
so for the 2004-05 marketing year, about 8 weeks of the export
inspection data and 7 weeks of export data are available from
the two weekly reports. Cumulative export sales data are available
from the time of the first sale for delivery during the current
Export inspections for corn from September 1 through October
28, 2004 totaled 267 million bushels, about 20 million less
than the total of a year ago. Inspections have averaged 32
million bushels per week during the first 8 weeks of the year.
To reach the USDA projection of 2.075 billion bushels for
the year, inspections need to average about 41.4 million bushels
per week from now through August 2005. Cumulative exports
during the first 7 weeks of the year, as reported in the USDA's
Export Sales report, exceeded inspections by 16 million bushels.
That report indicates weekly shipments now need to average
41 million per week to reach the USDA projection for the year.
Unshipped export sales of corn as of October 21, 2004 were
estimated at 336 million bushels, compared to 379 million
bushels on the same date last year. Japan, Taiwan, and Mexico
have smaller outstanding purchases than at this time last
year. Importantly, however, both shipments and outstanding
sales to South Korea are large, compared to very little activity
at this time last year. To reach the USDA projection, new
corn sales need to average only 33 million bushels per week
for the rest of the year. The average for the last 3 reporting
weeks was 51 million bushels.
Export inspections for soybeans from September 1 through
October 30, 2004 totaled 195 million bushels, about 15 million
above the total of a year ago. Inspections have averaged about
23.5 million bushels per week so far in the 2004-05 marketing
year. Cumulative exports for the first 7 weeks of the year,
as reported in the Export Sales report, were about 7 million
bushels less than inspections. Average exports of about19
million per week are needed for the rest of the year to reach
the USDA projection of 1.025 billion bushels for the year.
However, there is a clear seasonal pattern for U.S. soybean
exports because of the influence of South American production.
Weekly shipments tend to be large from October through March
and small from April through September. A weekly rate of about
30 million bushels from October through March 2005 would be
consistent with the current USDA projection.
Unshipped export sales of soybeans as of October 21 totaled
316 million bushels compared to 399 million on the same date
last year. The total of exports and unshipped sales were about
77 million bushels (15 percent) less than on the same date
last year. Business to Europe, Japan, Mexico, and Taiwan is
a little slower than last year. However, business with the
largest buyer, China, is at the same high level as a year
ago. To reach the USDA's projection for the year, new sales
to all destinations need to average about 13 million bushels
per week. The average for the last 3 reporting weeks was 35.3
Comparisons to last year's export pace should be made with
caution, particularly for soybeans. Last year soybean export
activity was very brisk in the first quarter of the year,
but dropped sharply in the last half of the year due to limited
supplies. It is a little early in the 2004-05 marketing year
to draw conclusions from the current pace of export activity,
but the slow pace of corn shipments is a concern. Sales need
to be sustained at high levels for the market to maintain
confidence in the USDA forecasts. Chinese export activity
will be an important factor in determining demand for U.S.
corn. For soybeans, Chinese buying and the progress of the
South American crop will be important.
Issued by Darrel Good
University of Illinois