A U.S. government agency reports another week of strong exports. A market strategist shares what is influencing the spike in sales below.
AUDIO: Brian Grossman, Zaner Ag Hedge
The U.S. Department of Agriculture (USDA) on Monday released its weekly Grains Inspected for Export. Zaner Ag Hedge market strategist Brian Grossman says it was “another strong day” with positive news early in the day.
“Corn coming in at 1.35 million metric tonnes, on par with last week and well above the same time last year. We are continuing our very strong pace with corn exports. Year-to-date, we are now at 4.4 million metric tonnes, above last year, which was 2.99. Soybeans — below last year’s 900,000, coming in at 590,000. Keeping China out of the picture, that is not a bad number. It could definitely be better, but all-in-all, not bad,” Grossman said.
A smaller corn crop has shifted selling priorities at ports in South America. Grossman believes such changes have strengthened United States corn exports.
“We did have a smaller crop in Argentina and Brazil, and their ports are focused on soybean deliveries right now. Some of that is coming over to us,” Grossman said. “About six to seven months ago, we were actually quite a ways behind our corn exports, but once Argentina and Brazil problems became evident, we saw a huge uptick. I believe that is still follow through because we don’t have that heavy competition from South America.”
Grossman previously referred to United States soybean exports as “not bad” given the current trade climate. China is still seeking ways to avoid the U.S. soy market. Grossman stresses the importance of cutting a deal with the Asian nation soon.
“China has plans to virtually cut out the U.S. soybean market, and that’s going to come down to a change in their feed ration. Whether or not they can do that, we’re going to find out. But, if we can get an agreement in the near future, that may encourage them to not be as aggressive to changing their feed ration,” Grossman said. “ given the U.S. soybean market ten-year low, it’d be enticing for some riskier grain buyer in China to come over and take advantage of this market.”
“There is a lot of talk that a China agreement could easily rally us 2 bucks. I don’t agree with that,” Grossman said. “I would expect us to get closer to 9 ¼, maybe 9 ½, we still have an overall fundamental problem. Add 250 million back onto the Chinese demand and we’re still sitting at a record high ending stock.”