The weekly export sales report brought disappointing results. However, political tensions may bring new opportunities for United States soybean exports.
The U.S. Department of Agriculture?s Foreign Agricultural Service recorded soybean export sales at 500,000 metric tonnes for the week ending June 14th. Zaner Ag Hedge market strategist Brian Grossman says this week?s sales numbers were rather disappointing.
?If you were watching the overnight session markets, we were a little bit higher across the board up until export sales came out, when soybeans turned and went red. As you can guess, it was a disappointing sales number with new and old crop coming in just a little over 500,000 metric tonnes,? Grossman said. ?Corn also had a very disappointing sale, barely 500,000 metric tonnes.?
This week?s sales may have been disappointing, but opportunities for future sales look bright. Grossman notes U.S. soybeans have found new markets, even on the brink of a trade war.
?We are not seeing a lot of shipments going to China. Even though 500,000 is not a great number, it?s also not a bad number. We are seeing a lot of those countries that are not in a trade war with us coming to the cheaper U.S. market,? Grossman said. ?Essentially, that?s going to balance the market back out.?
Grossman believes political tensions in South America could also enhance U.S. soybean sales. Brazil?s National Agriculture Confederation says disagreements between grain merchants and transportation companies have caused export delays. The feud over truck freight prices has delayed the export of 6.8 million tonnes of soybeans and soymeal.
?One, they have a major backlog for logistics. I believe they have a near record amount of ships waiting to be loaded. Even if everybody wants to go shopping down there, they?re not getting their product on time. If there is anybody that is going to need soybeans in a short amount of time, they may be forced to come to the U.S. market. And then logistics aside, the Brazilian markets have been trading $1.60 above the American markets. That?s pretty significant for the countries that are not in a trade war with us,? Grossman said.
