Fundamentally Speaking

Joel Karlin
DTN Contributing Analyst

Export sales for most grain and oilseed markets have really tailed off with much cheaper foreign offers.

The only market where our sales have remained robust is soybean meal and large advance bookings are keeping old crop soybeans well supported with processors forced to pay higher prices with farmers reluctant to part with the last of their 2012 bushels especially with this years’ slow soybean planting pace.

The latest export sales report showed total soybean meal sales at 10.138 million short tons and that is the highest end of May figure ever.

The WASDE report released earlier this month pegged total year soybean meal exports of 9.90 million short tons so this year’s sales already on the books have exceeded the latest USDA export projection by 2.4%.

The last and only other time this happened was back in the 1997-98 season when the end of May sales totaled 8.873 million short tons and that was 105% of the May 1998 WASDE projection of 8.450 million tons.

Given this situation, it appears likely that the USDA will have to increase its 2012-13 export projection similar to other years when a high percentage of final year sales projection given in the May WASDE was seen by the end of May.

Looking at the 1997-98 year that had the highest percent of the May WASDE sold by the end of that month, the final year’s exports totaled 9.615 million tons, or 114% of the May 1998 WASDE figure of 8.450 million tons.

The average end of May sales on the books as a percent of the May WASDE is 86.1% so a sales pace in excess of that usually augers for an upward adjustment in the export projection.

The largest upward revisions for soybean meal exports from the May WASDE estimate to the final figure was in the 2004/05 season when final exports of 7.34 million tons exceeded the May WASDE 6.0 million ton estimate by 122%, a year when actual sales as a percent of the May WASDE was 93.7%.

The largest downward revision occurred in the 1992-93 season as the final export figure of 6.398 million tons was 96.6% of the May 1993 WASDE estimate of 6.625 million tons.

That year end of May sales were only 71% of the May WASDE, the lowest figure on this graphic.

This history indicates that the USDA will be upping its 2012-13 soybean meal export estimate in subsequent WASDE reports.

(KA)