What keeps you awake at night? One analyst says a record large soybean crop and waning exports could push carryout to one billion bu. and that “scares” him.
Wheat exports have led the grains for the past two weeks, Peter Meyer of S & P Global Platts explained to U.S. Farm Report host Tyne Morgan.
“When was the last time we had that—especially around this time?” he asked.
According to Jared Creed of JC Marketing Services, soybean exports were the lowest they’ve been since 1990.
What’s causing the retraction? You guessed it, the trade war with China.
“We've seen what's happened with China as far as U.S. imports are concerned, they just dig their heels in. I think they're in it for the long-term,” Meyer said. “Now we have this whole discussion between Xi and Trump on Nov. 29 that was supposed to be a meeting at the G 20 meeting in Argentina and is now supposed to be just a conversation on the side. We're running out of time here for U.S. exports.”
According to Meyer, October, November and December are crucial months for U.S. soybean exports. And with the lack of exports Brazil could be a major threat to U.S. markets.
“If you look at what's going on in Brazil, never mind the politics, the crop went it good, the planting progress is okay [and] the moisture is fine. Those first Brazilian beans will be on the ship by mid-January,” he said.
By this time last year the U.S. had exported 2.5 million metric tons.
“This worries me,” Meyer said adding that he’s not sure if the trade has quite figured out what the combination of big yields and lower exports means for markets.
“When you look at the U.S. export pace, based off of this morning's number, you're at 1.3 billion bu., USDA is at 2.06 billion bu. I have used [for the last few months] a baseline of 2 billion bu. and I'm scared,” he said. “So now all of a sudden, what we thought was going to be a 500 million bu. will carry out just a few months ago now could be a billion bu. easily.”
Creed says U.S. farmers planted 90 million acres of soybeans and will come away with a potential record yield because they thought the export program would be at 2.2 or 2.3 billion bu.
“In February, Bob Johansen, USDA chief economist, stood in front of everybody In Washington DC and said 2.3 billion in exports, we are down to 2.06,” Meyer said. “We've been a 2.06 now for a few months. I don't think that they can do that with a straight face November given the pace we’re at now.”