Grain News: January 22, 2019 – Corn in Brazil, Crop to Watch
While we don’t get export sales reports with the partial government shut down, they do continue to report actual inspections of loaded grain each week. The US corn exports were reported at 43.6 million bushels, which is above expectations, however we need to average 46 million bushels per week the balance of the year to reach the USDA goal of 2.45 billion bushels. The amount of corn we export the rest of this year will greatly depend on how South American corn crop does. Brazil remains dry which has affected the soybean yield and a small area of their first corn crop. The growing progress of the second corn crop in Brazil, which is just starting to be planted, will be very important to keep track of.
Soybean export inspections were reported at 40.8 million bushels. This was a decent number, but we need to average 35 million bushels per week to reach the USDA goal of 1.9 billion bushels. This would be 27% higher than last year when South American soybeans are more competitive than US soybeans and the lack of China export program. Regardless of the export program in China, there are a lot of soybeans around.
Wheat exports are the same story. Decent numbers this week with 19.0 million bushels reported but we need to average 23.4 million bushels each week to reach the USDA 1.0-billion-bushel export number. Last year going forward we averaged just 15.9 million bushels per week.
So, the story is that demand is strong across the board for grains in the world but there is a lot of competition for US grains. Like every year, planted acres and weather will dictate most of the price action.
In other news, China has offered to go on a six-year buying spree to ramp up imports from the United States. Once again, another headline is all to work through the negation process on trade. Official GDP figures show the Chinese economy grew at the weakest pace since 1990 last month so the trade war is hurting their economy.
Brazil has harvested 6.1% of their soybean crop compared to 1.2% on a five-year average.
The markets today are once again not very eventful. Corn and soybeans are trading slightly lower and wheat is 5 cents higher. If the markets do trade a bit higher on a headline story or other news it might not be long lived. Please remember to have offers in place so that you can take advantage of a quick price move. You may want to look at new crop soybean and corn price levels as they sit today. While they are not spectacular, they are 20 cents higher in corn and 50 cents higher in soybeans than what current cash old crop prices. Give us a call if you would like to discuss further.