Corn data were the pick of the US weekly export sales report, reaching their highest-but-one level of the past 15 months – in marked contract to the soft statistics for wheat.
The US in the week to last Thursday achieved net export sales of corn of 1.89m tonnes for 2017-18 delivery, with Japan, Mexico and Peru among main buyers.
The figure was well ahead of the range of 500,000-800,000 tonnes in sales that investors had expected, and more than four times the volumes the week before.
It was also the second highest figure of this marketing year, and most of 2016-17 too, second only to a 2.36m-tonne reading in early November.
Still, while allowing a bit of catch-up on last season, US corn export commitments (ie sales and fulfilled exports combined) remain, at just under 29.0m tonnes so far in 2017-18, down 23% year on year.
They represent 59% of the total shipments of 48.9m tonnes that the US Department of Agriculture has forecast for this season, with a little over one-third of the season gone.
‘Narrowing of the sales gap’
Soybean export sales of 1.24m tonnes were also ahead of expectations, of 600,000-1.00m tonnes, and the best figure in four weeks.
Importantly, it was also a strong figure for the time of year – the best January week since 2013, in fact – raising hopes that the US might be able after all to make up for the some of the “acute lag” in shipments so far in 2017-18, as identified by the USDA.
The USDA said earlier that its forecast for US soybean exports of 58.8m tonnes in 2017-18 “implies a narrowing of the sales gap and a larger-than-usual percentage of exports in the season’s second half”.
Usually, it is Brazil, whose soybean harvest is in its early stages, that holds sway in world soybean exports earlier in the calendar year.
US wheat exports, however, for the latest week disappointed, coming in at 153,100 tonnes, well below the range of expectations of 200,000-500,000 tonnes.
Hard red winter wheat export sales were poor, at 77,223 tonnes, well below figures of 300,000 or so achieved in the run up to Christmas.
Soft red winter wheat export sales were dismal, at a negative 135 tonnes – ie showing net cancellations, for the first time this season.
In fact, in what seems to be setting an unusual trend, the US is selling more sorghum than wheat, with export sales of 189,000 tonnes of the feed grain, taking total commitments for 2017-18 to 4.77m tonnes – up 54% year on year.
Strong cotton volumes
The cotton market reported another week of strong export sales, at 275,060 running bales.
But, importantly, it recorded an improved performance too on shipments, of nearly 290,000 running bales, the highest of 2017-18 so far.
While cotton export sales are viewed as buoyant, with 7.52m running bales outstanding, up 58% year on year, it is the somewhat slugging pace of exports which has been concerning investors, now at 3.81m running bales so far this season (which started in August), down 9.3% year on year.
Indeed, even the latest performance has not allowed the gap to close.
‘Warehouses are booked solid, but…’
Ron Lee at Georgia-based McCleskey Cotton, speaking ahead of the data, said that “we need to put between 350,000 and 400,000 bales on a boat every week between now and July 31 to reach the current 14.8m-bale estimate” by the USDA for the full season.
He added: “I know our warehouses are booked solid through February, but for whatever reason, many loads are not being picked up.
“I cannot help but believe that the new E-Log regulations”, which involve trucking companies installing electronic logs to replace paper-based records of hours driven and rest periods,” and the overly harsh winter conditions are playing into this.”