Worries about slowing export demand for U.S. soybeans weighed on prices recently, but the latest figures from USDA showed better than expected buying still dominates the market. Still, the precise destinations for sales remain a mystery, and the extent of Chinese interest is also a bit murky. Here's why.
Total new bookings for soybeans were put at 28 million bushels, according to the weekly tally sheet put out by USDA this morning. China accounted for 14.1 million bushels of that amount, but not all those beans came from distinctly new purchases. Rather, 6.4 million bushels of that total were switched from sales to unknown destinations that may or may not have been made earlier – it's hard to tell because USDA also reported new sales of 8.3 million bushels to unknown destinations last week. China also cancelled a small out of its previous purchases for the second straight week.
Whatever the real story behind the new purchases, total net new bookings nearly doubled the rate forecast by USDA for the rest of the marketing year. That's another indication that sales will have to start slowing soon to keep the U.S. from running out of beans this spring and summer.
There's also no question about the swift pace of shipments, which is running at record levels for early in the season. Almost 63 million bushels were shipped to China in the latest week, according to USDA.
While soybean sales are strong, demand for corn has fallen to historically low levels. Net new bookings of 6.6 million bushels were 1 million better than last week, but put the level of shipments and sales at the lowest level since data was archived 25 years ago. That increases the likelihood for USDA to cut its forecast for exports in next week's monthly supply and demand report.
Corn sales and shipments to our biggest customers, Japan and Mexico, are both badly lagging behind last year's levels. China, which cancelled a previous purchase of 2.4 million bushels, has purchased 55% less corn this year, thanks to a record crop.
U.S. sales of wheat are also lagging, with the total for the week at 13.3 million bushels, putting both year-to-date sales and shipments below average levels. Buying out of North Africa and the Middle East has been noticeable slow so far, with the U.S. largely shut out of that market recently.