Fundamentally Speaking

Despite some decent export sales and inspection figures over the past couple of weeks, there is more doubt as to whether we can attain USDA targets for corn and soybeans.

Ground was lost due to all the logistical problems created by Hurricane Ida resulting in sales and shipments that are unlikely to be made up later in the marketing year, a far more restrained pace of Chinese purchases than seen a year ago, what appears to be a very good start for the Brazilian row crops and the surge in the foreign exchange value of the U.S. dollar that makes all of our exports more expensive in foreign markets.

Along these lines, this chart shows U.S. soybean and corn total export shipments through the third week in November in million bushels (mb) on the left-hand axis vs. those shipments as a percent of the November USDA WASDE export projection on the right-hand axis.

For soybeans, total shipments for the 2021/22 season at 691 mb though down sharply from the year ago level are still the fourth highest ever for this time of year and are 33.7% of the last USDA export projection of 2.050 billion bushels (bb) and that is above the 20-year average of 31.3%.

Total corn shipments as of the third week of November are 343 mb and that is a mere 13.7% of the November USDA export projection of 2.50 bb, and other than the 12.4% figure seen in the 2019/20 season, is really the lowest amount shipped as a percent of the November export projection since 2000.

This suggests that this year's corn export projection could be lowered in subsequent WASDE reports as the USDA did lower its bean export projection by 40 mb this month.

We should note that last year the percent of corn shipped as a percent of the November 2020 export projection was only slightly higher at 13.8%, also very low and well down from the 20-year average of 18.3%, but final sales proved to be 100 mb higher than the export projection at the time of 2.650 bb.

Different this year is again a less feverish pace of Chinese corn buying, the U.S. dollar appreciation and expectations of a huge rebound in Black Sea and South American corn production that will compete heavily with our product the second half of this marketing year.

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