U.S. soybean exports continue to disappoint while corn exports have become much more competitive this year. It’s a mixed story for the U.S. export market, and one that market analysts and economists are watching closely.
USDA’s weekly export sales for the week ending January 18 showed soybean exports were done 28% from the previous week. The poor export sales, combined with areas of South America seeing increased chances for rain, were enough to turn soybean prices south on Thursday and Friday.
“When you look at FOB values for US Gulf beans, we’re out of the market right now versus Brazil and Argentina, first of all,” says Matt Bennett of AgMarket.net. “Second of all, it’s that time of year. As you get into harvest in South America, beans are going to move towards the ports, and you’re going to have beans available and ready for shipment.”
Bennett says timing is also key. As harvest ramps up in South America, this is the time of year for prime soybean shipments and sales in Brazil.
“You add to that, the dollar has been on a bit of an uptrend here over the last few weeks. And bottom line is we’re out of the market. We’re talking $30 to $40 a ton depending on whether you’re talking to Brazil or Argentina.”
As Brazil harvests and the crop becomes available for export, it’s showing up in the weekly export sales reports. However, Krista Swanson, lead economist for National Corn Growers Association (NCGA) says the story is a little different for corn.
And of course right now Brazil is going to have a few more beans available for export.
“Exports in this marketing year, so far, are on target with the previous five years, but not including last year, which was trailing behind. And kind of like Matt was talking about with the FOB price compared to the Gulf, corn really had that challenge through a lot of last year where our price was just more expensive,” says Swanson.
Swanson says considering the harvest lasts so long in South America, it’s an issue that U.S. corn exports were challenged by into last summer.
“Fortunately, the corn price has come closer to a narrow range here in recent months. And we’ve really seen that export pace pick up in this marketing year to a more comfortable level. And if you look at where we are so far, and where USDA has pegged at about 2.1 billion bushels, if we can keep up this pace of exports, that’s a number that I think we can hit.”
Swasnon says corn exports are showing promise, but there could be some challenges ahead.
“The downside is when you look at where we’re at compared to Brazil’s exports in this marketing year, they are ahead of us, even though the U.S. exports have been strong, especially relative to last year.”
