October 30, 2000
CORN AND SOYBEAN EXPORTS START
For the current marketing year,
the USDA projects U.S. corn exports at 2.275 billion bushels.
That projection is 340 million bushels larger than last year's
exports and would be the largest in 11 years, exceeding 1995-96
shipments by 47 million bushels. World trade of corn is expected
to be about equal to that of last year, but the U.S. share of
exports is expected to grow from 60.3 percent last year to 71.2
percent this year. China is expected to export less corn due to
the shortfall in production. A smaller crop and smaller exports
are also projected for Argentina.
The recent recovery in U.S. exports
started in the summer of 1998 and persisted through the fall of
1999. For the last half of the 1999-00 marketing year (March through
August 2000), U.S. corn shipments, however, were 133 million bushels
less than during the same period in 1999. Through the first 8
weeks of the 2000-01 marketing year, the USDA export inspection
report indicates that U.S. corn exports are running about 21 million
bushels behind the pace of exports of a year ago. Of the major
importers, only Mexico has received more U.S. corn than during
the same period last year. The greatest decline (72 percent) is
in shipments to South Korea, where imports of Chinese corn remain
As of October 19, the USDA reported
that 272.5 million bushels of U.S. corn had been sold for export,
but not yet shipped. That is 16 percent less than the level of
outstanding sales on the same date last year. The largest year
over year decline in sales is to Japan, the largest importer of
U.S. corn. Of the major importers, only Taiwan had larger purchases
on the books.
Early season exports and export
sales are not always a good indication of shipments for the year.
The seasonal pattern is not consistent from year to year. Right
now, exports are continuing the decline started last spring. The
size of the Chinese crop may determine if that pattern continues
or is reversed in the spring of 2001. Some still argue that China
could appear as an importer of corn at that time.
Soybean exports for the current
marketing year are projected at 965 million bushels, about equal
to the record exports of last year. The USDA projects world trade
of soybeans at 1.657 billion bushels nearly 4 percent less than
trade during the 1999-00 marketing year. In addition, the 2001
South American soybean harvest is expected to be nearly 130 million
bushels (6 percent) larger than the 2000 harvest. The large U.S.
export projection is a little surprising in light of the slow
down in trade and larger crops in South America. The U.S. share
of world soybean exports is expected to grow from 56.3 percent
last year to 58.2 percent this year. Smaller South American exports
are expected due to increased domestic crush.
The current recovery in U.S. soybean
exports began in the summer of 1999, fueled by purchases by China.
Exports continue large, although shipments during the first 8
weeks of the current marketing year were about 13 million bushels
less than during the same period last year. Shipments to Japan,
Taiwan, and China are ahead of last year's pace, while shipments
to Mexico, South Korea, and especially the European Union are
behind last year's pace.
As of October 19, about 229 million
bushels of U.S. soybeans had been sold for export, but not yet
shipped. Outstanding sales were about 10 percent larger than on
the same date last year, so that total commitments were about
3 percent larger. Compared to last year, outstanding sales exceed
year-ago levels to all major buyers except Taiwan.
In addition to the size of the South
American crop, U.S. soybean exports will be influenced by Chinese
import policy. The USDA expects Chinese imports to decline by
about 90 million bushels (from all sources) even though domestic
meal consumption is expected to increase by about 10 percent.
The smaller import projection reflects a slightly larger crop
(26 million bushels), slightly larger meal imports (507,000 tons),
and a drawdown in stocks (46 million bushels). Some analysts believe
that Chinese imports will exceed the USDA projection.
In addition to revisions in U.S. crop estimates on November 9, the market will
carefully track U.S. exports and export sales for clues that current projections
are too high or too low. The slow start to the corn export program is of some
concern, particularly with the recent controversy over GMO corn.
Issued by Darrel
University of Illinois