US corn exporters cool despite China February soybean rumours

Reports that Chinese crushers could be looking to buy US soybeans for February lifting could provide competition for corn...

Reports that Chinese crushers could be looking to buy US soybeans for February lifting could provide competition for corn exports at key US export hubs, as the country’s corn exporters brace for a frenzied end to the marketing year.

The USDA has called for 2.65 billion bu (67 million mt) of corn exports through the 2020/21 marketing year, equating to an average pace of 1.3 million mt per week, but a heavy soybean export programme has diverted logistics and boosted corn prices as they compete for berth space.

“Weekly shipments so far this year of 32.5 million bushels continue to be light versus the 2.650 bbu USDA forecast,” Larry Shonkwiler of Advance Trading told Agricensus.

“The latter implies a balance-of-the-year rate of nearly 59 million bu per week. This would be one of the highest on record but very achievable if soybean exports follow their usual seasonal tendency with South America taking over from February forward,” Shonkwiler said.

For now, trade sources remain relaxed about the prospect of the US hitting the target.

“I do not see the Chinese being significant February US soybean buyers. Perhaps it’s some logistics fill as they worry about long Brazil line-ups. I still think the US corn program should be robust here as we move into the first quarter,” one trade source said.

But with such an ambitious export target, a near-flawless performance from US logistics was already needed to facilitate the move, and renewed competition between beans and corn for berth space at critical export hubs could yet derail that 67 million mt outlook.

To date, US corn export sales data shows accumulated exports of 12 million mt, according to USDA data, 29% of the total net sales of 41.5 million mt, and only 18% of the USDA’s total forecast.

US corn export inspections data is currently averaging around 790,000 mt per week over the first 15 weeks of the marketing year, leaving an export rate of almost 1.5 million mt per week for the balance of the marketing year.

“It looks as if combined corn/soybean exports for the September through November period were approximately 1.55b bu (around 40 million mt),” Shonkwiler said, with December through February expected to record a similar volume as corn supplants soybeans in the US line up.

“With two additional export facilities back in operation at the Gulf and potential weather delays aside, I think another 1.55b bu quarter is do-able,” Shonkwiler concluded.

To date, 63% of all US corn inspected for export has been handled by the US Gulf, a key facility for volumes bound for China and Japan, with 21% handled by the internal rail and container market – reflecting strong demand from Mexico.

The Asian-facing Pacific Northwest has handled only 16% of the exports, as corn has been crowded out by highly competitive demand from the Chinese soybean market.

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