December 11, 2023
Exports for main US agriculture commodities were found to decline, due to increased harvest from non-US key producers. Demand remained strong due to the softer dollar.
Wheat
Wheat exports remain resilient
- Wheat futures in the US surged past $6.2 per bushel, the highest in over three months, on stronger-than-expected exports
- USDA’s confirmed the sale of 440k metric tons of US soft red winter wheat to China, the largest such a purchase since 2020 as China aims to reduce imports from the Black Sea region. Still, record production seen over the past two years in Russia has kept global wheat prices low.
- In Canada, wheat harvests are exceeding earlier expectations, but the government still predicts the second-smallest crop in six years.
- Also, Australia’s winter wheat production forecast increased slightly, but dry weather is expected to result in a 37% smaller harvest than the previous year.
Corn
Corn exports increased substantially
- Chicago corn futures held around $4.7 per bushel, rebounding slightly from the near 3-year lows of $4.5 hit on November 29th, supported by a rebound in demand.
- According to the latest WASDE report, the US sales of corn reached 1,927k MT, a 10-season high, and the quickest pace for November in the 5-year range.
- This comes on the back of a softer dollar and the seasonal withdrawal of supply from the main producers Brazil and Argentina.
- Still, the prices are expected to remain low due to the US bumper harvest in 2023 and the expected rebound in Argentinian harvest in 2024.
Soybeans
US soybean exports retracted from high levels
- Soybean futures dropped below $13.2 per bushel, the lowest in one month, primarily due to the prospect of upcoming showers in northern Brazil, offering hope for improved crop conditions.
- While harvest forecasts for Brazil have been trimmed due to the ongoing drought, there is still an overall expectation of larger year-on-year production.
- USDA lowered its estimates for Brazil’s 2023/24 soybean production but still expects a record-breaking effort of 5.92 billion bushels. Argentina’s production potential held steady, at 2.17 billion bushels.
- On the demand side, the US Department of Agriculture confirmed private sales of 132k metric tons of US soybeans to China and an additional 198k tons to unknown destinations, all scheduled for delivery in the 2023/24 marketing year that began on Sep 1.