Fundamentally Speaking

A record pace of shipments through January prompted the USDA to increase its export projection of U.S. soybeans in last week's WASDE report by 20 million bushels to 1.790 billion, a new record.

With both sales and shipments continuing to surge despite the imminent harvest of a third consecutive record South American soybean crop, are additional hikes in the export projections likely in subsequent WASDE reports?

The accompanying chart shows U.S. soybean export sales and shipments as of the first week of February as a percent of the February WASDE export projection on the right hand axis.

The change in total U.S. soybean exports in million bushels from that February WASDE figure to the final figure is reported on the left hand axis.

As of the first week of February, 1.696 billion bushels or 94.8% of the new WASDE export projection of 1.790 billion has been sold and of that 1.401 billion or 78.3% has shipped.

Next to last year's 104% figure, this is the largest percent of soybeans sold as a percent of the Feb WASDE export projection since 1996 and the largest pace of shipments for this time of year since 1997.

The very strong sales and shipment pace augurs for additional export hikes in subsequent WASDE reports and the ten year average export change from the Feb WASDE to the final figure is an increase of 59 million bushels.

Note however that two years ago the percent sold and shipped as of the first week of February to the February WASDE number were not that much lower than seen this year at 92.9% and 77.0% respectively yet final soybean export demand for the 2012/13 season was 28 million bushels lower than estimated in the February 2013 WASDE report.

(KA)