Grains welcomed encouraging export sale numbers. However, shipments were a let down.
The U.S. Department of Agriculture (USDA) on Thursday released export sales data for the week ending April 11, 2019. Brian Grossman, market strategist with Zaner Group, says sales showed great strength.
“Old crop corn (came in at) 947,000 metric tonnes (and) 18,000 for next year. Old crop soybeans (came in at) 382,000, and the same goes for meal, (coming in at) 295,000. Wheat, cotton and all the way down – Those were all good numbers,” Grossman said.
Exports sales were favorable, yet one problem persisted – slow shipments.
“Corn shipments (of) 1.224 million metric tonnes is great, but we wanted to see 1.3 or higher to keep us on pace in reaching USDA’s target. Soybeans coming in at 470,000 is well below the 980,000 we need to be seeing,” Grossman said. “Soymeal came in well above what we need. Soymeal and soy oil have been the shining stars, but they’re not going to hold up the boat alone.”
The current shipment pace can be attributed to a couple different factors.
“First, it’s weather. Last year, a drought in Brazil gave good export sales to the backend of our 17/18 market year and for 18/19. But, their weather has been improving. This week, we heard another revised, higher estimate out of South America. And, we’re always fighting the currency battle. Emerging economies have much weaker currencies. Whether we talk about soybeans, corn or wheat, there is an emerging economy putting pressure on us,” Grossman said.
Whether or not shipments will pick up soon depends on “how the weather will play out.”
“Given the way our pace has been failing, I don’t necessarily have a lot of faith that we’re going to see a tick up. Unless we have some kind of a weather scare or a major correction in the dollar,” Grossman said. “The biggest thing is going to be the dollar. It costs a lot more for countries to buy from us than an emerging market.”