US soy exports to rebound to record top in 2018-19 - but corn, wheat volumes to fall


US soybean exports will rebound next season to a record high, boosted by the setback to Argentina’s crop from drought, but corn shipments will fall, while wheat prices will remain constrained by “strong export competition”.

The US Department of Agriculture, in much anticipated forecasts for US crop supply and demand in 2018-19, forecast soybean exports returning to growth, gaining 200m bushels to an all-time high of 2.3m bushels, equivalent to 62.6m tonnes.

Demand will be whetted by a further increase in China’s imports, which “are expected to exceed 100m tonnes for the first time”, the USDA said, in comments to its annual Outlook Forum.

Such growth, combined with “a decline in the 2018 South American harvest, is expected to ease competitive pressures that contributed to this year’s lower projected [US] exports”, the briefing said, amid continued downgraded to expectations for Argentina’s forthcoming harvest.

The US export forecast factors in a soybean crop this year of 4.32bn bushels, second only to 2017’s 4.32bn-bushel crop.

Stocks were forecast falling by 70m bushels to 460m bushels.

Corn exports to fall

For corn, by contrast, US exports will fall further in 2018-19, by 150m bushels to a four-year low of 1.90bn bushels (48.3m tonnes), the USDA said.

“Competition from Argentina, Brazil, and Ukraine is expected to limit US export prospects.

“Argentina is forecast to increase its exports despite the impact of below-trend yields in 2017-18 as corn area has expanded substantially in the last two years.”

Meanwhile, Ukraine “is expected to continue export expansion to countries in Asia, dampening prospects for the US in the region”.

Nonetheless, with this year’s US harvest seen falling by 214m bushels to a three-year low of 14.39bn bushels, curtailed by weaker sowings, and with use of the grain by ethanol plants seen continuing to grow, inventories were forecast falling despite the export downturn.

US corn stocks at the close of 2018-19 were pegged at a three-year low of 2.27bn bushels, down 80m bushels year on year.

‘Strong international competition’

US wheat inventories were also forecast falling next season, by 78m bushels to a four-year low of 931m bushels (25.3m tonnes), despite a fall in exports.

“Lower US supplies and continued strong international competition will challenge US wheat exports” in 2018-19, the USDA said, forecasting US shipments down 25m bushels at a three-year low of 925m bushels.

While “global consumption is projected to continue to grow particularly in the net importing countries of Africa and Asia”, the USDA forecast that the European Union will “have a larger crop, while Argentina is anticipated to continue to expand wheat area.

“Both Australia and Canada are expected to have ample exportable supplies”, while those in Russia will “still be abundant due to massive carry-in” after last year’s record harvest.

‘Potential for increased abandonment’

The USDA forecast a domestic harvest this year of 1.84bn bushels (50.0m tonnes), the lowest but one of the past decade – acknowledging some setback from the dry conditions dogging winter wheat crops in the southern Plains.

“At present, an estimated 42% of the 2018-19 winter wheat crop is located in an area experiencing drought,” the department said, revealing that its estimates factor in a figure of 83.4% for the proportion of sowings actually making it to harvest.

This ratio “is slightly below the long-term average and reflective of the potential for increased abandonment in the drought-affected winter wheat belt in the southern Plains”.


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