Fundamentally Speaking

New Crop Soybean Export Sales as of Mid-June

Joel Karlin
By  Joel Karlin , DTN Contributing Analyst

The USDA raised its soybean export projection for this year by 10 million bushels in last week's WASDE report to 1.810 billion bushels, a new record high and topping the prior high water mark set the year prior at 1.647 billion bushels.

With total commitments as of June 11th at 1.852 billion bushels with 1.735 billion shipped it appears that additional hikes in the 2014/15 export projection will be forthcoming with at least ten weeks left this marketing year.

The situation for the upcoming marketing year appears quite different with the USDA projecting our overseas sales next year at 1.775 billion bushels, an even lower figure than this year.

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This is linked to forecasted exports next year out of South America (Argentina, Brazil and Paraguay) 4.40 million metric tons or 162 million bushels higher than this year due to a bumper production this past growing season.

Another consideration is that estimated Chinese soybean imports are seen rising a mere 5.4% next year vs. the 15 year average of an annual 15.7% increase with their economy slowing to the lowest rate of expansion in more than a generation amid reports of a declining hog population.

Though the USDA in recent years has tended to underestimate final export demand for U.S. soybeans, the accompanying graphic shows new crop soybean sales running at the slowest pace in years.

The chart shows new crop soybean sales as of the second week in June in million bushels and those sales as a percent of the June new crop WASDE export projection.

For the 2015/16 season, total export commitments as of the second week in June are 213.6 million bushels, the lowest for this time of year since the 2010-11 season.

Furthermore this is a mere 12.0% of next year's projected total, the lowest percent for this time of year also in five years and the third lowest of the past ten years.

We note that new crop corn, wheat and soybean meal sales are also seeing very low levels of business relative to recent seasons.

(KA)

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