What is in this article?:
- Soybean export progress low, slow
- Last year’s levels
• Early forecasts of another large South American soybean harvest in 2012, partially due to generally favorable weather conditions in Brazil and Argentina in the early part of the planting and growing season, is one reason for the declining price.
• A slow start to the 2011-12 marketing year, domestic soybean crush and lagging soybean oil export sales have also contributed to the negative tone.
• In addition, concerns about world economic and financial conditions have cast a shadow over the future demand for soybeans.
Last year’s levels
Last year, export business was concentrated in the early part of the marketing year. Exports during the first quarter of the year accounted for 41.2 percent of the marketing year total. That compares to the average of 32 percent in the previous 5 years. Exports in the first half of the year accounted for 78 percent of the total. That is similar to the total for the 2009-10 marketing year, but compares to a more typical 67 percent in the period 2005-06 through 2008-09. Last year, export commitments (shipments plus outstanding sales) in late October accounted for nearly 71 percent of marketing year exports. “China was a very aggressive buyer early in the marketing year,” Good added.
In the previous 5 years, export commitments in late October accounted for an average of 44.4 percent of marketing year exports, in a range of 57.5 percent (2009-10) to 37.7 percent (2005-06). This year, export commitments as of October 27 represented 49.5 percent of the current USDA projection of marketing year exports. Except for the past two years, commitments represent the largest percentage of actual marketing year exports since 1997-98. Commitments are 23 percent larger than at this time in 2008-09, when marketing year exports totaled 1.279 billion bushels.
“There may be reasons to be concerned about soybean export demand, but the current magnitude of sales does not appear to be particularly troublesome,” Good said. “The recent pace of sales, however, has been very low.”
Good said to reach the USDA projection for the year, new sales will need to average 15.5 million bushels per week from November 2011 through August 2012. For the two weeks ended Oct. 27, new sales averaged only 8 million bushels per week. The pace of new sales and weekly shipments need to be followed closely to gauge the potential for marketing-year exports. In addition, the monthly Census Bureau export estimates should be monitored, as those are the official export estimates. The estimate of September 2011 exports will be released on Nov. 10.
“Typically, the difference between the USDA export inspection estimates and the Census Bureau estimates are small early in the year,” Good said. “In recent years, however, that difference has often become larger later in the marketing year.”
Good said by the end of the year, Census Bureau estimates were about 40 million bushels larger than USDA inspection estimates in the three years from 2007-08 through 2009-10. Last year, Census Bureau estimates for the year exceeded export inspections by only 14 million bushels.
The USDA will release new forecasts of U.S. and world soybean production and consumption for the current marketing year on Nov. 9. “The market appears to be expecting the forecast of U.S. marketing year exports to be below the October forecast,” Good said. “A smaller forecast seems premature based on the current status of sales and shipments.”