A measure of export demand for U.S. corn has just surpassed last year’s pace, helping to whittle down a domestic surplus of the grain.
For the year that began Sept. 1, total export commitments reached 44.69 million metric tons through the week ended June 2, the U.S. Department of Agriculture said Thursday. That’s 2 percent above the same time last year. The measure is a sum of accumulated exports plus outstanding sales.
The gains mark a reversal from earlier this season, when American grain shippers had difficultly generating demand amid a strong dollar and ample global supplies. In recent months, a weakening greenback and tightening supplies from Brazil has boosted sales of U.S. grain. Brazil’s crop-forecasting agency on Thursday lowered its outlook for domestic production by more than 4 percent because of dry weather. Most-active corn futures entered a bull market earlier this week.
“We’ve been on a clear accelerated pace now since mid-February,” Rich Nelson, chief strategist at Allendale Inc. in McHenry, Illinois, said in a telephone interview. “We expected these great sales to last maybe into early April, but I think we’ve been a bit surprised by the strength of the sales market here since. Available supplies is a big issue for Brazil.”
In the most recent week, net sales of 1.56 million tons of old-crop corn climbed 18 percent from the prior week and were triple the same period last year. Japan, South Korea, Venezuela, Vietnam and Saudi Arabia were among the buyers. Still, accumulated exports, measuring the amount of grain that has actually been shipped, remain 9.1 percent behind last year’s pace.
The USDA is scheduled to issue its monthly crop supply-demand report at noon on Friday in Washington. Analysts surveyed by Bloomberg expect the agency will cut its estimate for domestic inventories at the end of the current marketing year versus the May outlook. In last month’s report, the department forecast U.S. exports to total 43.8 million tons, 7.5 percent below the prior year. The rising sales pace means the agency could revise its projection.