November 26, 2001
SOYBEAN AND CORN EXPORT SALES
PATTERNS ARE NOT CONSISTENT
In its weekly Export Sales report
released on November 23, the USDA reported that 52 million bushels
of soybeans had been sold for export during the week ended November
15. That brings total export commitments (shipments plus outstanding
sales) for the year to 575 million bushels, compared to a total
of only 450.5 million on the same date last year. The largest
increases in sales compared to last year's sales are to Japan
(up 28 percent) and the European Union (up 26 percent). Sales
to China are about equal to those of last year, while sales
to Mexico are down 10 percent. Those four customers account
for nearly 60 percent of total U.S. export sales to date. Outstanding
sales to unknown destinations, however, totaled 105 million
bushels on November 15, compared to 37 million on the same date
last year. Those sales may be to China. If so, the four customers
account for 76 percent of total U.S. export sales to date.
For the year, the USDA projects
exports at 980 million bushels, 18 million less than exported
last year. With nearly 59 percent of that total already sold,
some wonder if exports will exceed the USDA projection. History,
however, suggests that the pace of export sales early in the
year is not a good predictor of exports for the year. Sales
as of mid-November exceeded 50 percent of the USDA projection
in six of the past 10 years. Exports for the year exceeded the
USDA's November projection in four of those six years. Excluding
1999-00, exports exceeded the November USDA projection by 12
to 40 million bushels (1.3 to 5.5 percent). The average increase
was 30 million bushels, or 3.8 percent. In 1999-00, exports
exceeded the USDA's November projection by 109 million bushels,
or 12.6 percent. In the four years with a slow start to the
U.S. export sales program, export sales exceeded the USDA's
November projection three times.
The fact that U.S. soybean exports
have exceeded the USDA's November projection in seven of the
past ten years gives some support to the argument that exports
this year might exceed 980 million bushels. The market is cautious,
however, due to the potential for another large crop in South
America in 2002 and because of the current economic slow down.
For corn, export sales during
the week ended November 15 totaled about 27 million bushels,
bringing total commitments for the year to 663 million bushels.
Commitments on the same date last year totaled nearly 667 million.
The slightly smaller total this year is the result of declining
sales to South Korea and Egypt. Japan accounts for one-third
of all U.S. export sales of corn. For the year, the USDA projects
U.S. corn exports at 2.05 billion bushels, 113 million bushels
(5.8 percent) more than exported last year. Only 31 percent
of that total has been sold for export. Does the slow start
to the export program imply that the USDA export projection
is too high? That conclusion is not supported by recent history.
In the five slowest starts to the U.S. corn export sales program
over the past 10 years, marketing year exports equaled or exceeded
the USDA November forecast three times. In the five fastest
starts to the corn export sales program, exports also exceeded
the November forecast three times.
Exports, then, have equaled or
exceeded the USDA November forecast in six of the past 10 years.
As a result, the corn market has not panicked because of the
slow start to export sales and export inspections this year.
There is a general expectation that U.S. corn exports will accelerate
during the last half of the marketing year due to smaller supplies
and exports from other key exporting countries. For example,
the USDA projects that combined corn exports from Argentina
and China will decline by 188 million bushels this year compared
to last year's exports. Exports by all countries excluding the
U.S. are expected to decline by 233 million bushels. Even with
a reduction in world trade of corn, there is room for U.S. exports
The soybean and corn markets will
be monitoring the rate of exports and export sales closely.
For soybeans, the development of the South American crop and
purchases (or cancellations) by China will be of most interest
for evidence that exports could exceed the USDA projection.
For corn, the market will show some patience with the slow pace
of export sales. However, the pace will need to accelerate after
the first of the year to maintain expectations that shipments
can exceed 2 billion bushels.