Share via Email


* Email To: (Separate multiple addresses with a semicolon)
* Your Name:
* Email From: (Your IP Address is 44.192.20.240)
* Email Subject: (personalize your message)


Email Content:

Commodity Report

02/08/2024

WEEKLY ECONOMY, ENERGY AND COMMODITY REPORT: February 8th 2024.

 

OVERVIEW

Prices for feed ingredients were down over the week partly in anticipation of the February WASDE Report. Prices were influenced by short covering arising from geopolitical concerns and the reality of bountiful harvests from Brazil and Argentine. Secondary factors included disruption in shipping in the Red Sea and Panama Canal, carryover from the 2023 U.S. crop, export orders and predicted ending stocks of corn and soybeans for 2024.

 

At 14H00 on February 8th the CME price for corn was down 3.4 percent compared to the previous week to 431 cents per bushel for March delivery. Corn price was influenced by increased ethanol demand and the size of the 2023 crop with proportionally high ending stock. Export orders for the current market year have increased in response to lower prices. Volumes and prices are indirectly influenced by events in the Black and Red Seas. Orders by China resumed at the end of the 2022-2023 market-year and have extended into February with an elevated dollar Index offset by low FOB prices. Total exports for the current market year are 30.9 percent higher than for the corresponding week in the 2022-2023 year.

 

Soybeans were down 1.4 percent from last week to 1,187 cents per bushel for March 2024 delivery. Gains were attributed to short covering. Total exports for the current market year are 22.1 percent lower than for the corresponding week in the 2022-2023 year.

 

Soybean meal was down a substantial 4.7 percent to $346 per ton for March delivery compared to $363 per ton last week. Price was influenced by demand coupled with record high crush volumes for three consecutive months through December. Price will fluctuate to reflect the CME price for soybeans and the rising demand for biodiesel. The market previously responded to the increased 2023 crop and higher stocks together with projections for 2024 included in the February WASDE Report.

 

WTI was 3.0 percent lower from last week to $74.13 on February 7th attributed to lower demand in relation to supply. The decline in price is despite disruption of shipping in the Red Sea, turbulence in the Middle East and stable U.S. reserves. The downward trajectory in price may be transitory if production cuts by OPEC become a reality, although Angola withdrew from the cartel. There was minor fluctuation in price during the week ($72.72 to $74.13 range). Crude oil inventory in the U.S., other than the Strategic Reserve, was almost unchanged at 28.1 million barrels last week following the seasonal trend.

 

Factors influencing commodity prices in either direction over the past four weeks included:-

  • Weather conditions in areas of the World growing corn and oilseeds especially in Brazil and also Argentine with favorable rain recently under the influence of a strong El Nino This in part compensated for the severe decline in yields that will be harvested from Mato Grosso State. The 2023 U.S. harvest was completed ahead of the corresponding weeks in 2022 with higher carryover (downward pressure).
  • Geopolitical considerations continue to move markets, especially in the Mideast. Cancellation of the BSGI in July and ongoing attacks on Ukraine port facilities impacted prices of wheat, corn, oilseeds and vegetable oils. Loaded bulk vessels are sailing from Black Sea and Danube River ports using the ‘Humanitarian Corridor” to various destinations. This route is operational despite threats by the Russian Federation to mine the entrance to ports and deploy airborne missiles. Exports from Ukraine are approaching 1 million metric tons per week with a total of 15 million metric tons market year to date. Grain production in Ukraine during the current year will be lower than 2021/2022 (Downward pressure on corn and wheat and an indirect effect on soybeans)
  • Macroeconomic U.S. factors:-
  • Most economists in academia and the private sector are confident of a “soft landing” for the economy following the release of revised Q4 2023 GDP and recent releases of economic parameters including the CPI and PPI and a decline in bond rates. Annual inflation as measured by CPI declined from 8.9 percent in June 2022 to 3.4 percent in December 2023. This is in part a response to a series of 11 FOMC rate raises that curbed inflation and cooled the labor market but without precipitating unemployment. There is evident stability in the bank sectors in both the U.S. and Europe. Large U.S. banks passed stringent mid-year “stress tests”. There is now concern over regional banks with exposure to commercial real estate.
  • The Federal Reserve held the benchmark interest rate steady at the monthly FOMC meeting on January 31st 2024, the fourth sequential pause. The Federal Reserve commentary indicated that the rate would be held at 5.25 percent until a pivot with possibly three reductions of 25 basis points each in 2024, after the March meeting at the earliest. Chairman Powell in Congressional testimony and documented in FOMC minutes has indicated that decisions would be based on data and progress in reducing inflation to near an annual 2.0 percent target by mid-2025.
  • The January 25th announcement of the advanced estimate of Q4 GDP confirmed a value of 3.3 percent, above the consensus estimate of 2.0 percent. The rise was attributed to increased consumer and government sector spending and investment in inventory. In 2023 real GDP growth should have attained 2.5 percent.
  • The February 8th 2024 S&P Manufacturing Purchasing Managers’ Index Report (PMI) rose to 51.8 in January from 51.0 in December 2023. The PMI is approximately three percent below the 10-year average preceding the COVID years. The recent upward trend suggests recovery from the effects of successive raises in the Federal reserve benchmark interest rate.
  • On January 26th The Bureau of Economic Analysis released the December Personal Consumption and Expenditure Price Index (excluding food and energy) that was up 0.3 percent from the previous month. The Index was up 2.6 percent year-over-year. This parameter is closely followed by the Federal Reserve and confirms declining inflation.
  • The January 11th Bureau of Labor Statistics release of the December CPI confirmed a 0.3 percent increase from November. The annual increase of 3.4 percent was higher than the anticipated value of 3.1 percent. The increase in the core value (excluding food and energy) was 0.3 percent, and 3.9 percent for the 12-month period, in line with estimates. Food at home was up 0.1 percent from the previous month. Food away from home was up 0.3 percent from November. On an annual basis all food was up 2.7 percent with food at home up 1.3 percent and food away from home up 5.2 percent. Energy was down 0.4 percent in December and down 2.0 percent over 12-months, mainly due to a decline in gasoline and diesel fuels. The shelter category was up 0.5 percent. The macro trend is clearly towards reduced inflation due to a fall in energy prices. The CPI influences FOMC rate decisions
  • The December Producer Price Index for Final Demand (PPI) released on January 12th was down 0.1 percent from November and up 1.0 percent over the past 12-months. This is compared to a 6.4 percent increase in 2022. The reduction was attributed mainly to 0.4 percent decline in final demand for goods and the concurrent cost of energy. The core PPI value excluding volatile fuel and food, was up 0.2 percent for the month and up 2.5 percent from December 2022. Food was down 0.9 percent compared to a 0.7 percent increase in November and 2.9 percent over 12-months.
  • A Federal Reserve release on January 17th confirmed that industrial production increased 0.1 percent in December to an index of 102.5 and was up 0.1 percent over the third quarter. Capacity utilization was unchanged at 78.6 percent, 1.1 percent below the 1972-2020 average.
  • According to the January 25th release by the U.S. Census Bureau the Manufacturers’, Shipments, Inventories and Orders (M3) Survey, determined that new orders during December were unchanged from November that in turn was up 5.5 percent from the previous month
  • The January 25th report on Durable Goods Orders for December 2023 was unchanged from November against an expectation of a 1.1 percent rise over the month.
  • The January 17th release of retail sales data showed a monthly rise of 0.6 percent in December. This value was above the 0.3 percent value in November. Year-over-year core retail sales increased 3.2 percent with a 0.5percent rise in December. The Federal Reserve FOMC closely monitors this index as a measure of the trend in inflation.
  • The February 1st ISM® Manufacturing Index for January rose to 49.1 from 47.4 in December.
  • The Conference Board Consumer Confidence Index released on January 30th for December/January, rose to 114.8 points, a six-month high. This reading was above the consensus of 104.0 and up from a revised 108.0 for the preceding four-week period.
  • The February 2nd University of Michigan Index of Consumer Sentiment rose to 78.8 for January up from a revised 69.7 in December. Both the Current Economic Index (79.0 up from 69.7 in December) and the Index of Consumer Expectations (77.1 up from 67.4 in December) denote an increase in consumer sentiment influenced by lower interest rates and moderating inflation despite geopolitical concerns.
  • Non-farm payrolls increased by 353,000 for January, as documented by the Bureau of Labor Statistics on February 8th. This was 6.0 percent higher than the revised December value. The increase is attributed to workers in the business, health care and services industries but a decline in the energy sector. The unemployment rate held at 3.7 percent for the third consecutive month. Real average weekly earnings for January showed a 0.6 percent increase over December. Average hourly earnings rose 0.6 percent to $34.55 in January up 4.5 percent over 12 months. Wage rates are closely followed by the Federal Reserve.
  • The Bureau of Labor Statistics Job Openings and Labor Survey report released on January 30th estimated 9.0 million job openings in December, unchanged from November and consistent with estimates. The December job openings number was the lowest value in 32 months.
  • Seasonally adjusted initial jobless claims released on February 8th fell to 218,000 for the week ending February 3rd, down 9,000 from the revised value for the previous week and lower than the Reuters estimate of 220,000. The four-week moving average amounted to 212,250 The Bureau of Labor Statistics estimated 1.87 million continuing claims for the week ending January 28th. There is evidence from data over the past three months that the labor market is cooling
  • The February 1st Bureau of Labor Statistics report recorded a 3.2 percent increase in non-Farm Productivity for Q4; Unit Labor Cost was up by 0.4 percent on a normalized basis and Hours Worked was up by 0.4 percent in Q4
  • The ADP® reported on January 31st that private payrolls increased by 107,000 in January, down 51,000 from the revised 155,000 in December and compared to the Reuters estimate of 145,000 jobs. The increase in employment was mostly in the service sector. Annual pay was up 5.2 percent year-over-year. The increase will not directly influence the probability of short-term future changes in interest rate since the ADP® is regarded by the FOMC as an unreliable statistic

 

FACTORS INFLUENCING COMMODITY PRICES

  • The 2023 harvests of corn and soybeans were completed by late November 2023. The February 8th WASDE provided a projection for acreage to be planted, yields, crop size and ending stocks for the 2024 crop.
  • It is evident that both polarization in the closely divided chambers of Congress and intra-party conflict between and among both sides of the aisle in the House will delay adoption of appropriations bills. Passage of the 2023 Farm Bill will be contentious and is subject to a 12-month extension as a stop-gap measure. Progress on the 2023 Farm Bill has been impeded by contention over SNAP eligibility and other entitlements that collectively represent 75 percent of total expenditure. The August 2nd downgrade of U.S. debt from AAA to AA+ by Fitch Ratings recognizes Congressional dysfunction. On November 10th 2023 Moody’s downgraded U.S. credibility from ‘stable’ to ‘negative’ based on an inability to pass required fiscal legislation. The House failed to pass eleven appropriations bills and passed an 11th hour continuing resolution deferring action to November 17th to finance the Federal government. Again failure to enact appropriations bills resulted in a second continuing resolution on November 15th freezing spending at FY 2013 levels pending votes on appropriations with extended deadlines of January 19th and February 2nd Little progress occurred in the closely divided House under current leadership with distraction caused by peripheral issues including dissention over the border situation, foreign aid and the magnitude of the National Debt. A third continuing resolution was passed on January 18th extending the laddered deadlines to March 1st and 8th respectively. A Federal shutdown would impact both equity and commodity markets and the image of the U.S. governmental system.
  • The delayed 2023 Farm Bill is mired in conflict in both the House and Senate. There is no consensus on major issues comprising the magnitude of SNAP payments and eligibility and price supports for crops.
  • The February 8th WASDE #645 Projected both corn and soybean production parameters with a potential record corn harvest for the 2024 crop. There will be ample world availability of ingredients although inequitable distribution will result in shortages in some nations. Soybean exports will comprise 39 percent of the 2024 U.S. crop with a 12.5 percent increase in ending stock. (See WASDE Report in this edition confirming availability, use and ex-farm price projections)
  • There is an expectation that for market-year 2023-2024, Brazil will harvest 155 million metric tons (5,695 million bushels) of soybeans up from a previous estimate of 153 million metric tons (5,621 million bushels) This shortfall is attributed to transient drought in Mato Grosso state. Exports of 100 million metric tons (3,674 million bushels) are anticipated and Brazil will crush 56 million metric tons (2,057 million bushels). A corn harvest of 118 million metric tons (4.666 million bushels) is anticipated with export of 54 million metric tons (2,125 million bushels). (Lower prices in the future subject to favorable reports on crop progress and actual harvests)
  • The Dollar Index (DXY) was 104.0 on February 7th, up 0.5 points from last week with fluctuation following uncertainty over future interest rates with a delay in the anticipated pivot by the Federal Reserve FOCM. The DXY has ranged from 99.9 to 107.0 over the past 52 weeks. The dollar index influences timing and volume of export orders and indirectly the price of WTI crude.

 

EXPORTS

The FAS Export Report for corn, released on February 8th for the week ending February 1st confirmed that outstanding export orders for corn amounted to 17.86 million metric tons (702.81 million bushels). Net orders for the past week for the 2023-2024 market year amounted to 1.22 million metric tons (48.0 million bushels). Shipments recorded during the past working week amounted to 0.78 million metric tons (30.81 million bushels). For the current market year to date cumulative exports of 17.05 million metric tons (671.09 million bushels) are 30.9 percent higher compared to the equivalent week of the previous market year. For market year 2024-2025 outstanding orders attained 1.28 million metric tons (50.18 million bushels) with no orders this past week

(Conversion 39.36 bushels per metric ton. Quantities in metric tons rounded to 0.1 million)

 

The FAS Export Report for soybeans covering the week ending February 1st reflecting market year 2023-2024, recorded outstanding export orders amounting to 9.50 million metric tons (349.14 million bushels). Net orders this past week attained 0.34 million metric tons (12.52 million bushels). Shipments for the past working week attained 1.66 million metric tons (60.80 million bushels). For the current market year to date cumulative exports of 28.95 million metric tons (1,064 million bushels) are 23.0 percent lower compared to the equivalent week of the previous market year. Outstanding orders for the 2024-2025 market year amount to 165,800 metric tons (6.09 million bushels) with 9,200 tons ordered this past week.

 (Conversion 36.74 bushels per metric ton)

 

For the week ending February 1st 2023 outstanding orders for soybean meal and cake attained 3.92 million metric tons. Net orders this week for soybean meal and cake amounted to 284,400 metric tons. During the past week 279,300 metric tons of meal and cake combined was shipped. The quantity exported to date is 11.4 percent higher than the volume for the corresponding weeks of the previous market year. For the next market year outstanding sales have attained 10,300 metric tons with 400 tons ordered this past week.

 

The February 8th 2023 WASDE projected:-

  • Corn area planted for all purposes in 2024 (‘new crop’) will attain 94.6 million acres, down 0.3 from last year. According to the February WASDE, yield was projected at 177.3 bushels per acre with a resulting production of 15,342 million bushels with 2,172 million bushels as ending stock. The USDA retained the average ex-farm price to 480 cents per bushel for the 2024 crop.
  • Soybean area to be planted for 2024 will attain 83.6 million acres, unchanged from 2023. According to the February WASDE, yield was predicted at 50.6 bushels per acre with production of 4,165 million bushels with 315 million bushels as ending stock. The USDA estimated an average season price of 1,265 cents per bushel.
  • Crushers are expected to produce 54.15 million tons of soybean meal. Ending stocks will attain 400,000 tons. The USDA held the average projected price at $380 per ton.

 

The preference for planting corn over soybeans in 2023 was based on a favorable projection of the corn to soy benefit ratio but will be revised following surveys of farmers during March concerning their planting intentions.

 

COMMODITY PRICES

 

The following quotations for the months of delivery as indicated were posted by the CME at 14H00, February 8th 2024, compared with values at close of trading on February 1st 2024 (in parentheses): -

 

COMMODITY

 

Corn (cents per bushel)

March 431 (446).

May 443 (457)

Soybeans (cents per bushel)

March 1,187 (1,204).

July 1,194 (1,223)

Soybean meal ($ per ton)

March 346 (363).

July 345 (361)

 

Changes in the price of corn, soybeans and soybean meal over five trading days this past week were:-

Corn: March quotation down 15 cents per bushel. (-3.4 percent)

Soybeans: March quotation down 17 cents per bushel (-1.4 percent)

Soybean Meal: March quotation down $17 per ton (-4.7 percent)

 

The CME spot prices for feedstuffs per short ton at close of trading on February 7th 2024 with prices for the previous week were:-

  • Corn (ZC): $155 per ton. Down $5 per ton from the previous week (-3.1 percent). 52-week range $157 to $241
  • Soybean Meal (ZM): $351 per ton was $370. Down $19 per ton (-5.1 percent) from the previous week. 52-week range $363 to $513

 

Values for other common ingredients per short ton:-

  • Meat and Bone Meal, (According to the USDA National AnimalBy-product Feedstuffs Report on February 2nd: $295 to $385 per ton (Av. $326 per ton) for porcine (ex MN); $150 to $290 per ton (Av. $241 per ton) for ruminant (ex MN). Price varies according to plant and location
  • According to the USDA National Grain and Oilseed Processor Feedstuffs Report on February 2nd wheat middlings from St. Louis, MO. and other locations: $108 to $115 per ton (Av. $112 per ton)
  • According to the USDA National Mill-Feeds andMiscellaneous Feedstuffs Report on February 2nd DDGS, (MO.) was priced at $190 to $240 (Av. $200 per ton compared to Pacific Northwest at $303 per ton). Price varies according to plant and location and is expected to fluctuate with the price of corn
  • University of Missouri Extension Service By-Product Feed Price Listing for December
  • Bakery Meal, (MO & TX): $190 to $220 per ton.
  • Rice Bran, (AR & CA): $190 to $240 per ton. (Av. $210).

 

For each $1 per ton (2.8 cents/bushel) change in corn the cost of egg production would change by 0.11 cent per dozen

 

For each $10 per ton change in the price of soybean meal the cost of egg production would change by 0.35 cent per dozen

 

There was a 1.2 cent per dozen increase in the nest-run production cost* for eggs this past week due to decreases in the spot prices of corn and soybean meal on February 7th compared to the previous week.

*(Rounded to 0.1cent)

 

ENERGY

 

The latest U.S. Energy Information Administration (U.S. EIA) report estimated that fuel ethanol blending would average 990,000 barrels per day in 2023, up 21.0 percent from 2022. For the week ending February 7th, 91.2 percent (87.5 percent for the previous week) of the U.S. ethanol fermentation volume was operational, based on January 2023 U.S. EIA capacity of 1,152 million barrels per day. The outlook for increased production will depend on higher domestic demand, from winter driving in addition to increasing the limited quantity exported attaining approximately 9 percent or the production equivalent to 2.8 days.

 

During November 2023 (the last month for which US Energy Information Administration data is available) ethanol exports were down 1.0 percent from October to 115.8 million gallons (2.768 million barrels). Importing nations and regions of significance and their proportions of total volume (rounded) for the month included:- 43.1 percent to Canada; 13.5 percent to Europe; 11.7 percent to India; 3.9 percent to the rest of Asia, predominantly South Korea; 2.9 percent to Mexico and 2.6 percent to Central and South America and the Caribbean.

 

According to the U.S. EIA, for the week ending February 2nd 2024 the industry produced on average 1,033,000 barrels of ethanol per day, up 4.2 percent from the week ending January 26th 2024 and now above the one million gallon per day benchmark. The reduction two weeks ago was attributed to extreme cold in the Midwest and Northern Plains resulting in shut-down of some plants.

 

On February 2nd 2024 ethanol stock was up 2.1 percent from the previous week to 24.8 million barrels, an approximately 24-day reserve. This past week demonstrated decreased demand for ethanol, given relative changes in the weekly production level (output up 4.2 percent and inventory up 2.1 percent over the most recent week)

 

Current Energy Prices:-

  • The price of WTI was down $3.04 per barrel, (-3.9 percent) to $74.13 per barrel on February 1st compared to the previous week. Issues affecting price last week included a conflict premium for Middle East crude and disruption of shipping in the Red Sea and hijacking of a tanker resulting in an escalation in bulk and liquid sea-freight. An OPEC+ production cut that commenced in July in addition to a voluntary one-million barrel per day reduction by Saudi Arabia announced on June 4th was extended through January 2024. The cut will be increased by an additional 0.7 million barrels per day although it is questioned whether all members of OPEC will comply. Angola withdrew from the cartel on December 20th The ending stock of crude at Cushing OK. on February 2nd was down 0.1 percent from last week to 28.1 million barrels and 34.5 percent down from the season high on June 23rd 2023. Hydrocarbon sources of energy contributed materially to inflation in the third quarter compared to the previous quarter of 2023 but was an important contributor to deflation in the fourth quarter of 2023.
  • Ethanol quoted on the CME (EH) on February 7th was priced at $2.16 per gallon, unchanged for months due to lack of trading activity. The 52-week range is $2.14 to $2.19 per gallon.
  • On February 7th RBOB gasoline traded on NASDAQ (RB) at $2.26 per gallon, up three cents (1.4 percent) from the previous week. Higher prices will become more evident in CME trading and ultimately at the pump. The 52-week range for RBOB gasoline is $1.98 to $2.97.
  • The AAA national average regular grade gasoline price was $3.15 per gallon on February 7th, up one cent per gallon (0.3 percent) from last week. Gasoline is now $0.99 per gallon more expensive than ethanol but has a 63 percent higher BTU rating. Future rises in fuel cost are inevitable given the increases in benchmark WTI
  • The AAA national average diesel price was $3.94 per gallon on February 7th, unchanged from the previous week but with prospects for future increases due to an extremely low national stock despite a fluctuating WTI price.
  • CME Henry Hub natural gas was priced at $1.98 per MM BTU on February 7th down 18 cents (-8.3 percent) from the previous week on lower demand due to milder weather.

 

INGREDIENTS

 

DDGS is freely available with most plants among the 192 operational on January 1st 2023 (the last available estimate) with a combined capacity of 1,152 million barrels per day functioning at a now restored 91.2 percent compared to 87.5 percent last week. The February 2nd USDA National Grain and Oilseed processor Feedstuffs Report priced DDGS from Iowa plants at $190 to $240 per ton, with an average of $200 per ton. Wide variation in price exists depending on supplier, quantity and location. It is axiomatic that the cost of DDGS will reflect changes in the price of corn with an appropriate lag period. Generally DDGS is currently incorporated at moderate inclusion levels in egg-production formulas based on price relative to the nutrient contribution of corn and other ingredients. This will change as corn and hence DDGS fluctuate in price

 

The CME soybean price for March 2024 delivery at 14H00 on February 8th was down 1.4 percent to 1,187 cents per bushel. The current price of soybeans is a reflection of availability for domestic crushing to produce oil, consumption and export orders. Soybean meal was down 4.7 percent on the CME to $346 per ton for March 2024 delivery. Prices of soybeans are obviously influenced by projections of harvest in the three major producing nations in South America, the projected 2024 harvest in the U.S. coupled with domestic demand for soy oil, biodiesel and meal.

 

According to a release on January 15th by the National Oilseed Processors Association, whose membership process 95 percent of the U.S. crop, the record soybean crush for December attained 195.3 million bushels of soybeans. This was higher than the consensus of estimates averaging 193.1 million bushels. Crush volume was up 2.9 percent from the previous record month of October 2023, at 189.8 million bushels and 3.3 percent above November 2023 at 189.0 million bushels. The high December crush was attributed to increased capacity and higher demand for biodiesel. January crush data will be posted in the February 23rd 2024 edition of EGG-NEWS.

 

On February 7th the CME spot price for soybean oil was up 1.0 cent per lb. (+2.1 percent) from the previous week to 46.9 cents per lb. Prices for vegetable oils have fluctuated over past weeks but have increased with recent elevzated demand. Asian crude palm oil was higher this past week. It is anticipated that 41 percent of U.S. soy oil was diverted from fuel to biodiesel during 2022 and this proportion will be exceeded in 2023 paralleling the situation in Brazil.

 

On February 7th CME soybean meal spot price was $351 per ton, $19 per ton lower than the spot price last week and compared to a 52-week range of $351 to $513 per ton.

 

On February 2nd Meat and Bone meal (porcine) was unchanged over a range of $295 to $385 per ton (Av. $326 per ton) according to the USDA National Animal By-product Feedstuffs Report, Prices quoted were for Minnesota plants but with a wide range based on composition, source and location. Price fluctuation reflects changes in soybean meal and other oilseed meals.

 

On February 7th conversion of the CNY to the BRL was BRL 0.70 unchanged from last week. The conversion of the CNY to the US$ was CNY 7.14, unchanged from the previous week consistent with the fractional rise in the Dollar Index.

 

For consecutive calendar years 2017 through 2019 the U.S. supplied 34.4 percent of soybean requirements for China amounting to 95.5 million metric tons. This was followed by a decline to 16.9 percent of 88.5 million metric tons in 2018 and 16.6 percent of 88.0 million metric tons in 2019. The USDA anticipated that soybean imports by China would attain 95.0 million metric tons during the 2020-2021 market year but in reality only 60.3 million tons was shipped through August 2021.

 

For the 2021-2022 market year net export sales of corn were down 21.5 million metric tons (844 million bushels) compared to the previous market year with cumulative exports of 38.3 million metric tons (1,507 million bushels) 

 

For the 2022-2023 market year net export sales of soybeans were down 5.6 million metric tons (206 million bushels) compared to the previous market year with cumulative exports of 51.5 million metric tons (1,893 million bushels)

 

For Market year 2022-2023 ending September 2023, a record 13.2 million metric tons of soybean meal and cake was exported valued at $7 Billion. Expansion in exports was attributed to orders from The E.U., Asia (Viet Nam) and Latin America. Crush volume was driven by the demand for soy oil to produce biodiesel fuel.

 

During calendar 2022, 58.0 million metric tons (2,243 million bushels) of corn were exported from the U.S., valued at $18,609 million. The top five importers with their respective values expressed as a percentage were: China, 28.2; Mexico, 26.4; Japan, 16.0; Canada, 7.2 and Colombia, 5.3.

 

During calendar 2022, 57.2 million metric tons (2,099 million bushels) of soybeans were exported from the U.S., valued at $34,392 million. The top five importers with their respective values expressed as a percentage were: China, 72.6; Mexico, 14.8; E.U., 11.3; Egypt, 6.1 and Japan, 7.3.

 

COMMENT

 

Subscribers are referred to the December 8th 2023 WASDE #643 for the 2023 harvest, the USDA Planted Acreage Report and the quarterly Grain Stocks Report posted under the STATISTICS Tab.

 

Following cancellation of the Black Sea Grain Initiative (BSGI) Ukraine commenced limited shipment of commodities from the three main Black Sea and Danube Delta ports that remain functional. Projected harvest during the 2022/2023 season will amount to 49.0 million metric tons, 42 percent lower than for 2021/2022. Exports were projected to attain 38.1 million metric tons, 26.5 percent lower than the previous market year.

 

Either more intense action by Ukraine, a negotiated peace treaty with concessions to the Russian Federation, or their combination will be required to restore unrestricted shipping in the Black Sea. Increasing passage along the costal-route (“Humanitarian Corridor”) has allowed sea-transport of commodities since early August to supply Asia and Africa.

 

Increased multinational naval activity has commenced in the Bab el-Mandeb Strait at the southern end of the Red Sea to restore shipping through the Red Sea and the Suez Canal that carries 15 percent of world sea-freight. Some shipping lines including Maersk of Denmark, Hapag-Lloyd of Germany and CMA of France have suspended transit of the Suez Canal and the Red Sea awaiting a clear resolution of the danger from missiles. This will require destruction of Houthi bases, radar and command installations and mobile launching equipment on the soil of Yemen. This is in progress.