Fundamentally Speaking

How Much Higher Will Soybean Export Forecasts Go?

Joel Karlin
By  Joel Karlin , DTN Contributing Analyst
Chart by DTN Contributing Analyst Joel Karlin

We suspect the recent leg of the ongoing grain and oilseed rally is tied more to ideas of USDA export projections being ratcheted higher in upcoming WASDE reports as opposed to large drops in crop output.

Corn and bean yield estimates still center around 176 and 50.5 bushels per acre (bpa).

Our corn and soybean sales to China have been at blistering, record paces.

Similar to what we did with corn last week, this graphic shows U.S. soybean exports in million bushels (mb) already on the books as of the second week in the marketing year starting September 1 on the left hand axis.

These sales as a percent of the USDA's Sep WASDE export projection are on the right hand axis.

Also reported in the boxes is the percent change in final U.S. soybean exports from that September WASDE projection.

This year's cumulative sales as of the second week in the marketing year total a record 1.188 billion bushels (bb), far surpassing the previous peak of 935.6 million bushels (mb) back in the 2014/15 season.

As a percent of the unchanged USDA September export projection of 2.125 bb (which is questionable in itself), they are however only the third highest percent.

The two higher points are the 74.7% share in the 2012/13 season and 58.9% of the September 2013 WASDE export projection of 1.370 bb on the books as of the second week of the 2013/14 season.

Those two marketing years 2012/13 and 2013/14 along with the following year of 2014/15 all had at least 55% of their projected final year exports sold by the second week of the marketing year.

Such a strong early season sales pace resulted in the final USDA export figure being revised quite a bit higher than what they indicated in September by 24.8%, 20.2% and 8.4% respectively.

We should note that in the 2009/10 season when exports the second week of the marketing year were also a strong 50.6%, final exports that season ended up 17.1% higher than what was projected in September 2009.

Consider even a 5% increase in the current export projection of 2.125 bb is another 106 mb of extra demand, bringing the current USDA 2020/21 ending stocks down to 354 bb, assuming no cut in this year's output, which is contrary to current thinking.

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