COLUMN-Are US soybean sales on track to meet export forecast? -Braun



Band Karen Braun

FORT COLLINS, Colorado, October 28 (Reuters)Soybean stocks in the United States at the end of next August are expected to more than double earlier forecasts of a bumper crop and summer supply shock, but some analysts believe carryover stocks could rise further in the future. due to an unimpressive export demand.

The current pace of sales looks particularly bad compared to the unusually high levels of a year ago, although it is certainly not the worst when you consider the other previous years. However, the outlook for selling in the coming weeks is a major concern given the slight interest from the main Chinese buyer lately.

The United States could be China‘s supplier of choice for just the next two to three months, so the window of opportunity for American exporters is closing quickly. But if Chinese demand remains sluggish as some expect, buyers might not hesitate to wait for the bountiful and cheaper Brazilian harvest early next year.

U.S. soybean commitments for the 2021-22 marketing year that began September 1 stood at 30.45 million tonnes (1.12 billion bushels) as of October 21. The U.S. Department of Agriculture projects annual exports to reach 56.9 million tonnes (2.09 billion bushels), so the latest sales total covers 54% of the ankle.

That’s well below 78% last year and above the previous two years at 39% and 38%, both battered by the trade war. Some 47% of October’s forecast was covered by the same date in 2017, but the three-year average before that was 64%.

China is doing well when it comes to its share of total commitments, which stood at 53% as of October 21. Aside from last year’s 55%, it’s the highest for the date in seven years.

However, China’s cumulative sales as a percentage of the US forecast for the full year are exceptionally low at 28%. Excluding the 2018-2019 and 2019-2020 trade war years, only one year since 2008 had a lower share on October 21, which was 24% in 2017-2018. A year ago, Chinese reservations were 43% of forecast.

It’s impossible to know how much US soybeans the USDA assumes for China, but in recent years (excluding years of the trade war), the Asian country has accounted for about 57% of annual US bean exports.

Applying this average to the current USDA outlook would target soybean shipments from the United States to China at around 32.3 million tonnes in 2021-2022, half of which had been sold as of October 21. That’s a few percentage points lower than before the trade war. mean.

The slow pace of 2017 deserves a closer look. At the end of November, sales covered 57% of the export outlook and only 32% of bookings were from China. Outside of the years of the trade war, these are the lowest shares since at least 2007.

As of October 2017, the USDA had 2017-18 U.S. soybean exports pegged at a record 2.25 billion bushels, less than 1% of the eventual record last year. The outlook was unchanged in November, but the agency cut 25 million bushels in December.

Final exports that year stood at 2.134 billion bushels, just below the high of the previous year, although bulls in demand were bailed out by too high export prospects as the trade war cleared the US beans for non-Chinese buyers in early mid-2018.

Recent trends suggest that the current pace of soybean sales may not be enough on its own to expect USDA’s outlook to decline next month. However, if Chinese imports were reduced, exports from the United States, not Brazil, would be the most likely to get the shears.

Brazil beans for the start of next year are cheaper than today’s American product, and the growing season is starting faster than normal. Additionally, the industry tends to underestimate Brazil’s harvest at this point.

(Edited by Matthew Lewis)

(([email protected]; Twitter: @kannbwx))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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