US soybean and corn sales for the 18/19 crop year are nearly double last year’s pace, despite export blocking tariffs, thank you very much. Corn bookings are almost 8.9 million tonnes (MMT) versus 4.4 year ago. Soybeans sales are at 11.5 MMT versus 6.4 last year. (Graph below)
Corn sales are stronger today largely due to the smaller Brazilian corn crop. Brazil’s crop is down 15.5 MMT from year ago. The bulk of the reduction is in the second crop, which is where most of Brazil’s exports are derived. US corn exports are also facing less competition from European and Russian feed wheat. Russia still has old crop wheat to ship, likely into October. When the Russian wheat is gone, US corn has little competition until Brazilian second crop corn starts shipping next July. IAG is estimating corn exports to the EU will rise by 3 MMT. US will ship 2.4 billion bushels for 17/18 crop and the sales did not accelerate until February (Sep – Aug crop year). USDA is estimating US exports at 2.35 billion bushels for 18/19, we (IAG) have exports at 2.45, and it’s possible our estimate is too small.
Soybean sales are higher on non-Chinese sales. Sales to non-Chinese destinations are up 6.6 MMT (189%) YOY. (Graph below) The cause is simple, tariffs have put Brazilian beans for October at a premium of $1.70/bushel, and Argentina has no exportable soybeans. IAG estimates have China taking 10-15 MMT of US soybeans in 18/19 with tariffs in place, up to 40 MMT if tariffs are removed. The non-tariff range is dependent on when the tariff is taken off. We will have a good indication by October the level of US sales to China.
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