Fundamentally Speaking

With the U.S. setting new all-time soybean export records for the past four years in a row, USDA has rarely lowered its projection of overseas sales but they did do this in the January 2018 WASDE report by 65 million bushels to 2.160 billion.

This appears to be the second largest downward adjustment in exports from the December to the January WASDE report ever, topped only by a 70 million bushel reduction from the December 2005 to the January 2006 WASDE reports.

Even with this lower figure, many in the trade are looking for further downward adjustments for 2017/18 U.S. soybean exports given the still lagging sales and shipment pace especially to our largest customer China.

This graphic shows total U.S. soybean sales and shipments in million bushels as of the middle of January and also as a percent of the January WASDE export projection.

The USDA export projection of 2.160 billion bushels is 2.9% below the 2016/17 sales figure of 2.225 billion but through the middle of January sales of 1.589 billion lag the year ago figure by 13.3% while shipments at 1.178 billion are 14.2% below the comparable year ago shipment pace.

Current sales are 73.5% of the January WASDE estimate, the lowest figure since the 2006/07 marketing year and the third lowest since 1999-2000 while the shipment number as a percent of the January WASDE estimate is 54.6%, the lowest since the 2011/12 marketing year.

The chart does show that in we had the same situation two years ago though a late developing South American drought did boost our exports from February through September so the same thing could happen again.

Note however that the current sales pace is the slowest since the 2006/07 season and final sales that year were 132 million below the January WASDE projection.

(KA)