Feed markets have surged to the upside as ideas that SX would head to $8.00 and CZ well below $3.00 by harvest just little more than a month ago.
This has been completely undone by derecho damage, a flash drought in some of the most productive farm ground in the country and the largest purchases by China of a variety of U.S. agricultural items, not just corn and soybeans, seen in years.
The September USDA crop production and supply-demand estimates were close to trade expectations and for corn even exceeded them.
This has failed to blunt the fund driven ascent with soybeans at their highest levels in more than two years and corn at their loftiest prices since early March as many participants do not believe the government figures.
Many also feel in subsequent crop production and WASDE reports that both 2020 U.S. corn and soybean production will be revised lower as will ending stock estimates.
Though corn exports were hiked by 100 million bushels (mb) to 2.325 billion bushels (bb), surprisingly the USDA kept Chinese corn import demand at 7.0 million metric tonnes (mmt) even though the U.S. already has 8.8 mmt of corn exports to China on the books for 2020-21, suggesting the final export figure may be quite a bit larger than what is now being projected.
This graphic shows U.S. corn exports in million bushels already on the books at the start of marketing year September 1 on the left-hand axis and these sales as a percent of the USDA's September WASDE export projection.
Also reported in the boxes is the percent change in final U.S. corn exports from that September WASDE projection.
This year's sales at the start of the marketing year total a record 741.9 mb, far surpassing the previous peak of 656.1 mb back in the 2007/08 season.
As a percent of the new USDA export projection of 2.325 bb, they are however only the second highest percent topped by the 41.1% market seen in 2013/14.
We should note that the exceptionally strong early season sales pace that year did eventually result in the final 2013/14 export figure of 1.920 bb, a whopping 56% higher than the September 2013 WASDE export projection of 1.225 bb, so this could portend perhaps sizable increases in our overseas sales projections.
The other years where sales were already 30% or more of the September WASDE export projection (such as the 2011/12 and 2012/13 seasons) actually saw final exports fall short of that September estimate, though all three years from 2011-13 were influenced by the impact of the 2012 drought.
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