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Weekly Grain Movement – Sales sag

Disappointing corn, soybean exports highlight latest USDA report

For the week ending July 11, export sales remain nothing short of lackluster, according to Farm Futures senior grain market analyst Bryce Knorr.

“Corn’s total of just 13.1 million bushels of old and new crop business continues to justify USDA’s decision last week to reduce its forecast for 2018 marketing year sales, with new crop purchases also off to a slow start,” he says. “For soybeans the issue is not sales, but shipments with a very brisk pace needed through the end of August to reach’s USDA projection for old crop.”

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But China remains the bigger long-term worry, Knorr adds.

“The world’s largest importer of soybeans bought nothing this week, cancelling some small old crop purchases and booking nothing for delivery in the 2019 crop marketing year as trade talks drag on,” he says. “Chinese buyers still have 193 million bushels of old crop deals on the books that may be rolled over past the Sept. 1 start to the new crop marketing year.”

Soybean sales tallied 4.7 million bushels in old crop sales plus another 7.3 million bushels in new crop sales last week, for a total of 12.0 million bushels. That was slightly better than the prior week’s tally of 9.6 million bushels but below trade estimates of 14.7 million bushels.

Soybean export shipments fared better, with 33.4 million bushels. Despite China’s lack of activity last week, the country remains the No. 1 destination for U.S. soybean export commitments this marketing year, with 30% of the total. Other leading destinations include the European Union (15%), Mexico (10%), Egypt (5%), Japan (5%) and Indonesia (5%).

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Corn exports saw 7.9 million bushels in old crop sales plus another 5.2 million bushels in new crop sales for a total of 13.1 million bushels last week. That was slightly behind the prior week’s total of 15.6 million bushels and moderately below trade estimates of 22.6 million bushels.

Corn export shipments reached 26.8 million bushels last week, meantime. Mexico remains the No. 1 destination for U.S. corn export commitments this marketing year, with 31% of the total. Other top destinations include Japan (25%), Colombia (9%) and South Korea (7%).

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Wheat exports moved slightly higher to 12.8 million bushels last week, besting the prior week’s tally of 10.5 million bushels and trade estimates of 11.0 million bushels. The results were still tepid, Knorr says.

“Sales last week fell short of what’s needed to reach USDA’s forecast for the 2019 marketing year, which could be too optimistic,” he says.

As with corn, Mexico is the leading destination for U.S. wheat export commitments so far this marketing year, with 14% of the total. Other top destinations include the Philippines (13%), Japan (8%), unknown destinations (8%), Nigeria (7%), South Korea (5%), Algeria (5%) and Taiwan (5%).

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