Fundamentally Speaking
Joel Karlin DTN Contributing Analyst

Tuesday 10/02/12

History of Corn Export Sales 3rd Week in September

The USDA’s 2012-13 U.S. corn export projection is currently pegged at 1.250 billion bushels which if true would represent the lowest level of foreign sales since the 1985-86 season and may be the second lowest in the past 40 years.

In that regard, the total export sales as of the third week of September at 398 million bushels, albeit the lowest figure for that date in seven years is 31.8% of total projected final sales.

Though well below the 37.7% figure from last year it is well above the 10-year average of having 26.1% sold as of the third week of September.

Even though it is early in the marketing year, we were curious if this sales pace had any ramifications for the final export figure.

This piece looks at the total U.S. corn sales in bushels as of the third week in September and takes those sales as percent of the final projected export figure contained in the September WASDE report.

We then look at the change in the WASDE export projection from that given in September to the final report of that marketing year issued 14 months later.

Does the fact that U.S. corn sales are already at 32% a mere three weeks in the marketing year suggest that the export figure may be hiked in subsequent supply-demand reports?

This is not necessarily the case especially in light of the abysmal sales reports in recent weeks and the fact that 2012 U.S. corn output may be lowered in future production reports.

Last year by the third week of September the U.S. had sold 38% of the 1.650 billion bushels that the September 2011 WASDE had estimated for total 2011-12 exports.

Despite this final year exports last season came in at 1.540 billion bushels, 110 million less.

Right now though the market is fretting about lackluster export sales, the fact is that high prices are needed to ration demand and farmers are incentivized to plant lots of corn next spring.


Posted at 9:43AM CDT 10/02/12
Comments (1)
The market may be saying; "USDA has the US corn export numbers too high." A look at the World minus US balance sheet may confirm that notion. A decline of 240 million bushel of US corn exports could be in the cards. That number could stretch to a 500 million bushel decline if the importers are willing to drop ending stocks from beginning of the year levels and our export price remains unappealing. The same thought process may be working into the soybean price. The though was there was a widow of potentially very tight World supplies of soybeans. This was to occur in the February to March time frame. During this period of time, the US was to run out of exportable supplies and South America had not begun to harvest their new supply of exports. That tightness may have been alleviated with the increasing US production. If this is the case, we may be on that long tailed slide to much lower prices. USDA might be projecting domestic use too lower but the potential degree of export reduction could surpass that domestic estimate.
Posted by Freeport IL at 3:57PM CDT 10/15/12
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