Fundamentally Speaking

This past week saw U.S. 2021/22 corn, soybean and wheat export sales all at a marketing year lows. Yet, even with that, USDA increased its wheat export projection for this year by 20 million bushels (mb) and for soybeans by 25 mb. However, in somewhat of a surprise, corn export sales were left unchanged at 2.50 billion bushels (bb).

There is much more interest in the coming year as USDA in its May WASDE report gave its first projections of the major crop balance sheets for the 2022/23 season. Exports of corn are projected 100 mb lower at 2.40 bb based on our higher prices due to strong domestic demand and far less of a crop than had been anticipated earlier in the year due to much lower farmer planting intentions than expected and the USDA's unusual move to lower the 2022 projected corn yield by 4.0 bushels per acre (bpa) to 177 bpa.

USDA did increase soybean exports by 25 mb this year to 2.140 bb with production at 4.640 bb based on March 31 planting intentions of 91 million acres and yield unchanged at 51.5 bpa versus USDA's February Forum figure of 4.490 bb on the same yield but lower seeded area at 88 million acres. USDA allowed export sales to increase by 60 mb for the 2022/23 season to 2.20 bb.

With South American row-crop production coming in lower than forecast, lost exportable supplies out of Russia and Ukraine and still keen Chinese interest in procuring U.S. product, our new-crop sales have been quite impressive.

This graph shows both new-crop corn and soybean sales in million bushels as of the first week in May on the left-hand axis and as a percent of the first USDA new-crop projection from the May WASDE report on the right hand axis.

This year's new-crop soybean sales as of the first week of May are 412.4 mb, the most ever four months before the new marketing year starts, though they are just 18.7% of the first 2022/23 WASDE export projection of 2.20 bb, which is not a bad figure. But that percent was higher back in the 2012/13 and 2013/14 seasons and we should note that final soybean exports those years were quite a bit higher than what USDA had initially projected.

The amount of new-crop corn sold as of the first week of May is also the most ever at 196.5 mb and like soybeans the third highest percent of the May WASDE export projection going back to the 2000/01 season. Also, in the 2012/13 and 2013/14 seasons with the latter also seeing a big jump from that first WASDE estimate to how many actual bushels were exported that season. The point here is, with a strong start to the marketing year and the tendency for USDA to have its first export projection well below what actual overseas sales turn to be, one could argue that USDA's mere 60 mb increase in soybean export projection for the upcoming marketing year and actual 100 mb forecasted decline in our corn export sales are far too low.

(c) Copyright 2022 DTN, LLC. All rights reserved.