Corn buyers may be voting with their wallets. After searching for alternatives to U.S. corn for the first quarter of the 2011 marketing year, foreign importers are finally stepping up purchases as global supplies start to shrink.
Net new bookings in the latest week totaled 41 million bushels, with traditional customers like Japan, Mexico and South Korea stepping up their purchases. The sales to Japan, usually the biggest customer of the U.S., were especially encouraging because year-to-date shipments there are off 15% from 2010-2011. Purchases by drought-stricken Mexico have made up the gap, putting year-to-date commitments well ahead of the meager pace forecast by USDA. That supports our longstanding notion that demand is better than the agency projects.
While big Chinese purchases have yet to materialize, the world's largest country has taken almost 95 million bushels of 2011 corn to date. It continued its recent pattern of buying a load or two, despite a huge crop there.
Wheat sales were also good at 22.7 million bushels, in line with increasing trade expectations. Leading buyers like South Korea and Mexico are starting to book multiple cargoes, urgency that was lacking in the first half of the marketing year. Wheat exports also look like they could beat USDA's current forecast, especially with U.S. prices becoming more competitive on world markets.
White wheat was the leading class again, accounting for 58% of the deals in the latest week. That's one reason basis off the PWN has surged in recent weeks.
Soybean sales beat the rate forecast by USDA for the marketing year but were well below last week's total and trade guesses at 21.8 million bushels. China took 77% of the total for old crop, along with a couple loads for next year. Still, its overall imports have been sluggish, with traders waiting to gauge demand when markets reopen there next week after Lunar New Year holidays.
For the complete export report, click here.