Export inspections out of the U.S. remain good as the summer winds down. But the volume of corn and soybean isn’t as big as some years that have seed fire-sale prices ignite wholesale clearance.
To be sure, crop prices are far from great when viewed from the perspective of farmers losing money on sales. Growers appear to be holding on as long as possible to old crop inventories of corn and soybeans, helping boost basis in the export pipeline.
Export inspections of corn last week eased to 27.2 million bushels, below the low end of trade guesses, and less than the five-year average for the week. Still, the total was above the weekly rate needed to reach USDA’s forecast for the market year ending Aug. 31. The 2016 crop selling season is turning out to be one of the best on record, thanks to drought that cut shipments out of Brazil last year. That led to a surge of shipments a year ago, when the total topped 50 million bushels as farmers cleared out space for record crops.
Mexico remained the leading destination for corn as NAFTA talks got underway, taking 9.4 million bushels. Japan was a close second with a million less, with most of the rest going to Central and South American destinations.
Soybean inspections of 24.4 million bushels were above average for the tail end of the marketing year, when shipments normally tail off. That wasn’t the case a year ago either, thanks to movement out of Brazil that’s again slower than normal as farmers balk at selling due to low prices.
Total inspections of 2016 crop soybeans lag the pace forecast by USDA, but are still likely to reach the government’s projection. Official exports tracked by the Census Bureau are running around 3% above inspections, enough to make up the difference.
China was again the leading destination, as its purchases continue to improve in August after a summer lull. The world’s largest importer of soybeans added another 10.2 million bushels, with most of the rest going to Mexico, the Middle East and South Asia.
Wheat inspections of 21.4 million bushels were in line with trade guesses and beat the weekly rate forecast by USDA for the 2017 crop. While the government sees exports dropping slightly, the year-to-date total is up around 12%.
Inspections were spread around Asia, the Americas and Africa, with multiple buyers showing up. China led all takers with 4.4 million bushels, followed by the Philippines with 4.2 million. Though China has huge reserves of wheat it normal imports higher quality grain it can’t produce at home.