Fundamentally Speaking

2019/20 U.S. Soybean Exports Falling Short of Target

Seemingly lost in the action last Friday dominated by the dramatic change in weather forecasts and USDA WASDE report was the fact that China picked up its second largest amount of U.S. corn ever and a sizable amount of U.S. wheat.

This news was followed however by some discouraging statements out of the White House about dim prospects for a Phase 2 accord with China where some of the more contentious issues were to be addressed.

This gave rise to thoughts that perhaps this would derail the Phase 1 part of the agreement where at least $40 billion of a reported $200 billon in Chinese purchases of all-American goods would be targeted to agricultural items.

With weather no longer a positive influence, it appears the most supportive factor at least for corn and the soy complex is hopes of large Chinese purchases.

For soybeans this is of the utmost importance and the situation appears sobering.

This graph shows unshipped U.S. soybeans as of beginning of July in million bushels on the left-hand axis.

On the right-hand axis are these unshipped sales as a percent of July WASDE export projection and the percent beginning of July cumulative soybean exports are above or below that WASDE export estimate.

At a still hefty 302.4 million bushels (mb) or 18.3% of the 1.650 billion bushel (bb) export projection which, other than last year's 369.6 mb (which was 21.7% of the July 2019 WASDE export projection of 1.70 bb), is the highest ever for this time of year.

Current total exports as of the beginning of July of 1.690 bb are actually 2.4% above the July WASDE projection, but the ten-year average is for sales to be 2.8% above the July WASDE, so we are lagging in that regard also.

The point is at least 37.8 mb have to be shipped each week for the next eight weeks to meet this target, yet weekly shipments have only averaged 15.0 mb over the past ten weeks, suggesting a lot of this year's beans sales will be carried over into next year, a further burden on attaining that 2.050 bb target for this coming year, a whopping 400 mb over this year's estimate.

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