After The Recent Export Surge, US Ending Stocks Aren’t Expected To Change

green-leafed plants

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Market Analysis

The upcoming USDA December 8 monthly crop report hasn’t prompted much market talk. With no US corn & soybean crop size update, the trade’s focus has been on South America’s weather outlook and the rainfall levels that have occurred in the various Argentine and N Brazil dry areas since trading resumed after the US Thanksgiving holiday. With the Pacific in an El Nino pattern, the markets have been very sensitive to the weather forecasts given this year’s erratic planting conditions. Excessive rains in southern Brazil & dryness in Mato Grasso and in the north have delayed seedings by 12-15%.

This has reduced Brazil’s plant stands across many areas of the country. With no US crop updates, the USDA has traditionally limited its major crop demand changes until its January final US crop production report is issued.

China’s dramatic reemergence in the US grain & soybean markets over the past month has swung this year’s overseas sales back to their seasonal paces to achieve the USDA’s previous export forecasts. China’s recent 245 million bu in soybean purchases has this year’s sales only 5 million behind the 5-yr average seasonal level to hit the current 1.755 billion bu forecast. Last week’s record 201.4 million Oct US bean crush has already pushed this demand 8.5 million above 2020/21’s previous record. Overall, US stocks should stay at 245 million.

Corn’s US export sales have jumped by 205 million bu be- cause of recent Mexican, Chinese & Unknown sales. This has sliced the gap to only 80 million below the 5-yr seasonal pace to hit the USDA’s 2.075 billion forecast. This year’s two-month corn utilization of 892 million bu for US ethanol production is also the highest level in 5 years. Given these demand paces, no changes in US corn demands are expected resulting in an unchanged 2.156 billion bu stock level this month.

This week’s hefty soft red Chinese wheat buy has also put 2023/24’s US exports slightly above its seasonal pace. This suggests the USDA will leave its stocks at 684 million bu.

Given Brazil’s delayed bean plantings, the trade is expecting 3 mmt bean & 2 0 mmt lower corn USDA estimates at 160 & 127 on Friday. Many S American analysts have larger declines

What’s Ahead:

Despite recent rains, S America’s poor growing conditions have reduced seedings & stands (plant populations). Brazil’s output remains vulnerable for further declines without very timely rains. Argentina has breathing room, but low subsoil remains an issue. Looking to up Jan bean sales to 65% at $13.70-85, March corn to 50-55% at $4.90-$5.10 & March KC wheat to 65% in the $6.75-95 range.

More By This Author:

Slightly Larger US Soybean And Corn Crops Prompts Small Stocks Changes
Slightly Smaller US Corn & Soybean Crops Dip Ending Stocks This Month
Lower Soybean & Corn Yields Reduce US Ending Stocks

Disclaimer: The information contained in this report reflects the opinion of the author and should not be interpreted in any way to represent the thoughts of any futures brokerage firm or its ...

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