Fundamentally Speaking

New Crop U.S. Corn Export Sales

Joel Karlin
By  Joel Karlin , DTN Contributing Analyst

The recent pop in U.S. corn futures has not spurred any increased foreign buying for either old or new crop positions.

It appears the current 1.825 billion estimate for this year will be met for with ten weeks left in the 2014/15 marketing year total commitments are 1.775 billion bushels.

For the coming year the USDA has projected 1.90 billion bushels of corn to be exported in the June WASDE report but the accompanying graphic which shows new crop corn sales as of the third week of June in million bushels and as a percent of the June WASDE projection shows 2015/16 sales a mere 111.4 million bushels.

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That is 5.9% of next year's overseas sales projection and that percent and the total bushel amount are both the lowest figures in five years and the third lowest of the past nine seasons.

The general complacency can be attributed to ideas that even with less U.S. corn production this year than last both domestic and global supplies are more than ample.

We understand that the average trade guess for the upcoming June 1 corn stocks estimate of 4.555 would be the highest for that time period since 1988.

There are also large supplies in Argentina, Brazil, Russia and Ukraine that compete heavily with U.S. corn that is further burdened by a relatively strong dollar.

The situation is not unique for in a prior post we noted that new crop soybean sales are also tracking at five year lows in terms of tonnage and as a percent of the new crop June WASDE projection.

After years of tight stocks and record high prices that spurred foreign buyers to procure coverage earlier rather than later the dramatic climb in global grain and oilseed stocks to multi-year or even record highs, there is a much more relaxed attitude with many willing to wait until the Northern American harvest to procure more aggressively as prices on average are usually at their lowest point of the season.

(KA)

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