Corn, Soybean Sales Good But Shipments Lag

Wheat business continues to slow down despite bargain prices.

Low prices and cheap ocean freight are apparently teaming up for an offer buyers can't refuse, at least for corn and soybeans, which enjoyed better than expected export sales. USDA released its regular weekly report on Friday, delayed by the Columbus Day holiday.

Soybeans lead the parade of new business, with 37.8 million bushels of total sales, more than doubling expectations and well exceeding the weekly rate the government forecasts for the rest of the marketing year. Unknown destinations accounted for some 40% of the total, with China taking three more loads. An increase in Chinese buying was also noted this week, with the government there apparently trying to rebuild reserves it depleted to control food inflation in the run up to this summer's Olympics.

Shipments, however, remain somewhat sluggish, as buyers have been slow to actually load out purchases. While ocean freight continues to crash — it's own 85% from peak levels due to a slowing economy, falling fuel prices and lack of credit to get ships out of port — buyers are taking a cautious approach for now. Soybean shipments at 15 million bushels in the latest week remain behind the rate forecast by USDA for the marketing year.

Corn also saw decent, but not explosive, sales in the latest week, with the total coming in at 38.4 million bushels. That was well above trade guesses, and also beat the weekly rate USDA forecasts. Japan, which was a slow buyer early, again took the most, 16 million bushels. The rest of the business focused on buyers from the Americas. Shipments improved to 36.4 million bushels, but still lag USDA's forecast.

Wheat sales of 16 million bushels fell behind trade guesses, but continue to run above the USDA forecast for the marketing year. Buyers came from around the world, though Asian demand remains slow. Shipments of 23.9 million doubled the rate forecast by USDA, with buyers able to finance food purchases more easily than livestock feed.

 

Weekly Export Sales (million bushels)

 

 

 

 

 

 

AS OF WEEK ENDING

10/16/08

 

 

 

 

 

 

 

Actual

Est.

Last Week

USDA F'cast

Export Ship-ments

USDA F'cast

% of USDA Commit.

Ave.

% of USDA Ship-ments

Ave.

Wheat

    16.0

  18.4

    24.7

      6.5

23.9

10.3

65%

49%

44%

32%

Corn

    38.4

  25.6

    22.4

    30.9

36.4

40.1

29%

25%

8%

9%

Soybeans

    37.8

  18.4

    17.3

    11.7

15.0

19.3

41%

33%

3%

4%

Source: USDA, Reuters

TAGS: USDA
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