Brisk US corn, soy sales paces tempered by China's absence

FE Team | Published: December 13, 2024 23:46:58

NAPERVILLE, Illinois, Dec 13 (Reuters): After multiple weeks of impressive volumes, last week's US corn and soybean export sales were a disappointment.
Luckily, total export sales for both crops still cover an above-average portion of full-year expectations, which are extremely healthy in the case of corn.
But China's limited involvement with soybeans remains somewhat alarming, and this is a theme that carries across many of the top US agricultural goods typically exported to China.
GOOD PACE
US corn and soybean export sales in the week ended Dec. 5 hit 11- and 19-week lows, respectively, and both fell below the range of trade estimates. However, that did not tarnish the recent progress.
The US Department of Agriculture on Tuesday raised its 2024-25 US corn export outlook by 150 million bushels, which by percentage was the month's largest increase in exactly 30 years.
As of Dec. 5, some 56 per cent of USDA's full-year corn export target had been sold, above the date's average of about 50 per cent. Mexico, Colombia, European Union members and unknown destinations all boast record US corn booking paces for 2024-25, which began Sept. 1.
USDA this month did not adjust its relatively modest outlook for 2024-25 US soybean exports, but as of Dec. 5, total sales covered 75 per cent of the forecast versus an average of around 70 per cent.
The strong US corn export program laid out for 2024-25 features no participation from China thus far, but soybean shippers might be getting nervous. China accounts for only 46 per cent of all US soybean sales, the lowest share in 18 years outside of the trade war years of 2018 and 2019. Something closer to 57 per cent is typical.
An optimist might propose that China's laggard approach means it will soon have to play catch-up, leading to plenty more US bean purchases.
But that scenario is questionable when the world market is staring down a Brazilian soybean crop potentially 20 million metric tons larger than a year ago, while China's annual imports are set to shrink. The Brazilian harvest begins next month.
CHINESE REJECTION
It is not just soybeans and corn that China is snubbing when it comes to US farm exports, which is concerning given that trade with China could come under further pressure as President-elect Donald Trump has pledged steep tariffs on the country.
In 2023, the top US agricultural exports to China by value were soybeans, corn, beef, cotton, pork and sorghum, accounting for 77 per cent of the total.
As of Dec. 5, US cotton export sales to China for 2024-25 were at nine-year-lows for the date. US sorghum sales to China were at two-year lows and down 68 per cent on the year.
Beef sales to China are at four-year lows though down only slightly from last year, and pork sales are at six-year lows. China had also increased its presence in the US wheat market in recent years, but those sales currently stand at six-year lows.
Some of this is explainable. Lighter US cotton crops in the last two seasons as well as a contraction in the cattle herd are expected to lead to lighter cotton and beef exports. Pork production in China has returned to more normal levels in the last couple of years, reducing import needs.
This trend does not hold at the wider scale because in the first 10 months of 2024, US bulk commodity export volumes to all destinations were up 20 per cent from the same period last year. Bulk commodities primarily refer to grains and oilseeds.
But bulk shipments to China in that same period were down 13 per cent from last year, reaching a six-year low.