December 6, 2004
CORN AND SOYBEAN EXPORT PACE IS MODEST
As emphasized in earlier issues, the corn and
soybean markets tend to focus on export demand for fundamental price
direction at this time of year. The end of the first quarter of
the marketing year, November 30, is a good time to review export
For the 2004-05 marketing year, the USDA currently projects corn
exports at 2.05 billion bushels, 8 percent more than exported last
year and the largest marketing year shipments since 1995-96. U.S.
corn exports have exceeded 2 billion bushels in only 7 years. Since
1996-97 annual exports have averaged 1.818 billion bushels, in a
range of 1.504 to 1.981 billion. The projected increase in U.S.
corn exports for the current year is based primarily on prospects
of reduced competition from China. The decline in the value of the
U.S. dollar may also be a positive factor for exports, but higher
freight rates have offset some of that benefit.
Three sources of export data are available, the USDA's weekly grain
inspections report; the USDA's weekly Export Sales report; and the
Census Bureau's monthly estimate of exports, which is the official
estimate used in USDA balance sheets. Export inspection data is
available through December 2, 2004, which represents the first 13.3
weeks of the 2004-05 marketing year. The data for the week ended
December 2 are subject to revision, but inspections for the first
quarter of the year are currently estimated at 466.3 million bushels,
2.6 percent less than cumulative shipments of a year ago. Shipments
have averaged 35.1 million bushels per week during the first quarter
of the year and need to average 40.9 million per week from now through
August 31, 2005 to reach the USDA projection for the year.
Export data from the Export Sales report is available through November
25, 2004. That report shows cumulative corn exports of 436 million
bushels, 12.2 million more than indicated in the inspections report,
and 2.5 percent less than indicated in this report last year. Based
on this report, shipments have averaged 34.1 million bushels per
week so far this year and need to average 41.1 million per week
from now through August in order to reach the USDA projection.
Finally, Census Bureau export data are available only for September
2004, the first month of the 2004-05 marketing year. That report
showed corn exports of 161.4 million bushels, 18.8 million more
than indicated in the inspections report, and 11.1 million more
than indicated in the Export Sales report. All three reports indicate
that the pace of corn exports is a bit slow in relation to the USDA
projections for the year. Of the major buyers, Japan, Taiwan, South
Korea, Egypt, and Mexico, all but Japan are on a slower import pace
than that of last year.
Unshipped U.S. corn export sales as of November 25, 2005 totaled
351.1 million bushels, compared to 406 million bushels on the same
date last year. Japan, Taiwan, and Egypt all had smaller outstanding
purchases than on the same date last year. New sales need to average
about 32 million bushels per week to reach the USDA's marketing
year projection for corn exports.
For the 2004-05 marketing year, the USDA projects U.S. soybean
exports at 1.01 billion bushels, 14 percent more than the small
exports of a year ago. Exports exceeded a billion bushels in 2001-02
and 2002-03. For the week ended December 2, 2004, cumulative U.S.
soybean export inspections since September 1, 2004 totaled 401.8
million bushels, 2.5 percent more than cumulative exports of a year
ago. Data from the Export Sales report through November 25, 2004
indicated cumulative export shipments of 361.3 million bushels,
6 million less than indicated by the inspections report, and 2.6
percent more than exported a year ago. Cumulative shipments to China
are up 31 percent and shipments to all other destinations are down
17 percent. Finally, the Census Bureau export estimate for September
2004 was 47.2 million bushels, 2.8 million more than indicated by
inspection and 3.5 million more than indicated in the Export Sales
report. At least through the first month of the year, the three
sources of soybean export data are more consistent than in most
years, particularly last year.
Unshipped export sales of U.S. soybeans as of November 25, 2004
totaled 231 million bushels compared to 345 million on the same
date last year. Both China and Mexico have smaller outstanding purchases
than a year ago. While export shipments are on a fast pace, unshipped
sales are lagging a bit. Importers may be a little more patient
than last year due to huge U.S. supples and a large expected increase
in South American production. The post-harvest price strength defies
the prospects of large surpluses, contributing to buyers' reluctance
to be too aggressive.
Issued by Darrel Good
University of Illinois