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Column: Record U.S. soy sales become record shipments, but corn hangs back

NAPERVILLE, Ill. (Reuters) - The U.S. Department of Agriculture has projected a banner performance over the next year for domestic corn and soybean exports, and so far, sales have been living up to the hype.

A fertilising mechanism fertilises soybean fields in Gideon, Missouri, U.S., May 16, 2018. REUTERS/Shannon Stapleton/File Photo

Those bookings have translated to a record shipment pace for soybeans, but corn has yet to turn out the drastically larger export volumes.

The 2020-21 marketing year for U.S. corn and soybeans began on Sept. 1, but buyers had already booked a record number of cargoes prior to that date. Ever since, sales have continued at a very robust pace, especially for soybeans.

As of Oct. 15, the United States had sold 45.35 million tonnes of soybeans for export in 2020-21, some 76% of USDA’s full-year target. That is the second-largest share within the last decade behind 2013 (81%) when considering sales and expectations as of the same date.

But final 2013-14 soy exports were 20% larger than what was expected at this point in the marketing year. Unless 2020-21 exports are gravely underestimated, then this year’s sales pace has indeed been unusually strong.

As of Oct. 15, some 55% of total U.S. soybean commitments were to China. For the date, that is more than in the years just prior to the trade war when the average was around 50%. But it is not as high as the 2011-2014 era when it was around 65%.

U.S. corn sales totaled 28.3 million tonnes as of Oct. 15, some 48% of USDA’s target. The recent five-year average for the date is 31%. Only 2011 and 2013 had a larger share by the same date given expectations at the time.

Some 37% of those corn purchases are destined for China, a previously unheard-of portion. The roughly 20% share by this date in 2013 is the closest comparison.

USDA predicts U.S. corn exports in 2020-21 to reach 2.325 billion bushels (59.1 million tonnes), up 31% from last year’s slump. Soybean exports are forecast at 2.2 billion bushels (59.9 million tonnes), also up 31% on the year largely due to China’s return to the U.S. market.

SALES TO EXPORTS

Realizing actual shipments is important if the export sales are to have complete legitimacy with traders. For soybeans, that transition has not yet been disappointing. According to weekly export inspection data, a proxy for shipments, volumes for soybeans have been larger than in any other year in every week so far in the 2020-21 marketing year.

That streak may appear to have been broken in the latest week through Oct. 15, but USDA usually revises the previous week’s number in each report. Based on the recent upward revisions that have been observed, the streak probably lives on.

Corn export inspections have been consistent and a bit above average through mid-month, but domestic corn inventory in recent months has not been as plentiful as in prior years. Harvest is still ongoing and U.S. corn exports typically pick up in the second half of the marketing year, so the absence of eye-popping corn shipments is not yet worrisome.

USDA’s latest export sales report that covers the week ended Oct. 15 suggests that a third of the U.S. soybeans China has booked for 2020-21 has already been shipped. That is a similar rate as the same date in 2015 but behind those of 2016 and 2017, which were both around a record 38%.

The rate of total shipped corn to sold corn is predictably low through Oct. 15 at 19%. That is close to 2013’s rate and the lowest in at least a decade. The recent five-year average for the date is 32%.

The opinions expressed here are those of the author, a market analyst for Reuters.

Editing by Matthew Lewis

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