FORT COLLINS, Colo. (Reuters) - U.S. soybean exporters had a record fourth quarter and corn shipments slumped to a six-year low. But overseas demand for U.S. corn is starting off the new marketing year on an even worse note, while the soybean market hopes for renewed Chinese business.
The United States exported 4.93 million tonnes of soybeans in August, a record for the month and the third consecutive monthly record, according to data published on Friday by the U.S. Census Bureau. That put shipments in the fourth quarter of 2018-19 some 19% above last year’s record for the period.
Top buyer China was instrumental in the banner quarter. Some 6.34 tonnes of U.S. soybeans were shipped to the Asian country between June and August, more than double the previous Q4 record. Traditionally, the United States ships most of its soybeans to China between October and February.
August exports to China totaled 2.68 million tonnes, the highest for any month since January 2018.
However, total soy shipments to China reached only 13.32 million tonnes in the entire 2018-19 marketing year, the lowest volume since 2006-07. The trade war was the original cause for the reduced numbers, and the problem worsened as African swine fever spread through China’s massive hog herd.
Business to other countries was also respectable in Q4. Soybean exports to non-China destinations totaled 5.46 million tonnes, down some 42% from last year’s anomalous record but the second-highest ever. Mexico was the No. 2 recipient with 1.25 million tonnes.
Weekly export inspection data published by the U.S. Department of Agriculture implies that around 3.8 million tonnes of U.S. soybeans were shipped in September. That would be second-highest for the month after September 2017, if realized. The data suggests just under a million tonnes of beans set out for China last month.
August U.S. corn exports totaled 2.83 million tonnes, the lowest monthly volume since November 2017. Shipments in Q4 of 2018-19 hit 8.78 million tonnes, down 56% from the previous year and the smallest by far for the period in six years.
Total corn exports for 2018-19 were a four-year low at 52.3 million tonnes, down 15% from the previous year’s record. The 2018-19 shipment pace started out huge but lost steam as time went on, sliding behind 2017-18 in June and then opening the gap further.
The 2019-20 year is off to a very bad start for U.S. corn exporters. Inspections data suggests that September shipments may have barely broken the 2 million-tonne mark, making them the lightest for the month since 1975.
As of Sept. 26, China was the lead buyer of U.S. soybeans for 2019-20 with 3.6 million tonnes on the books, according to USDA. That is more than two times larger than on the same date a year earlier, but well below “normal” volumes of the past, when up to 10 million tonnes or more would be sold by the same date.
China’s soy purchases have increased since, with potentially more than 1 million tonnes of the oilseed booked since Sept. 26. Trade talks between the United States and China will resume later this week, and traders will be watching for additional sales of soybeans.
Total soybean sales to all other countries as of Sept. 26 stood at 10.68 million tonnes, a six-year low. But USDA is still relatively conservative with its 2019-20 export estimate of 48.3 million tonnes, up less than 2% from the previous year but aside from that, a six-year low as well.
Corn sales are terrible, and although it is early, USDA’s export estimate is very generous at this point. Through Sept. 26, only 9.7 million tonnes of U.S. corn had been sold for export in 2019-20, the lightest for the date since 2002.
However, USDA sees corn exports hitting 52.1 million tonnes this year, less than 1% lower than in 2018-19.
The United States shipped 56,660 tons of pork to China in August, the second-highest monthly volume on record behind July. Through the first eight months of 2019, total exports to China hit 294,453 tons, some 34% more than in all of 2018. China has been buying U.S. pork despite sky-high tariffs because of a meat shortage caused by African swine fever.
Some 2.57 tonnes of U.S. wheat were shipped in August, the third month of the 2019-20 year for wheat. That was the highest monthly total since May, and it brought the first-quarter total to 6.67 million tonnes, slightly above the recent five-year average.
But wheat shipments have been sluggish since. Inspection data implies September exports at just over 2 million tonnes, roughly 14% higher than a year ago but below the five-year average. September 2018 wheat exports were the lightest for the month since 1971.
USDA sees wheat exports in 2019-20 growing 4% on the year to 26.54 million tonnes.
In the 2018-19 marketing year for U.S. sorghum, exports totaled only 2.3 million tonnes, the lightest in six years. That is down 55% from the previous year and down 74% from 2014-15’s record.
China is typically the leading destination for U.S. sorghum, and that held true in 2018-19 despite the trade war. The United States has traditionally exported up to half or more of its sorghum supply annually.
The opinions expressed here are those of the author, a market analyst for Reuters.
Editing by Matthew Lewis