U.S. Soy Sales Continue To Disappoint

The pace of U.S. soybean export sales remains very disappointing, suggesting USDA will have to further lower its projection for 2005-06 exports in December. USDA reported soybean export sales for the week ended Nov. 17 of just 8.1 million bushels, compared with trade expectations of 18.5-25.5 million bushels. That weekly total was a marketing year low and was 68.5% below the average of the previous four weeks. What may be even more troubling to the market is that the weekly report suggests Chinese buyers have been “washing out,” or selling back U.S. cargoes. USDA reported that sales of 68,400 metric tons of U.S. soybeans to Taiwan and 58,000 metric tons to Spain were all switched from China. Through Nov. 17, U.S. soybean export sales commitments for 2005-06 stood at 408.6 million bushels, 29.3% below a year earlier. The current USDA projection for 2005-06 is for exports to come in only 2.5% below a year earlier. The main reason for the slow pace of U.S. sales appears to be continued stiff competition from large South American soybean stocks.

Chinese customs data indicates that China imported 1.897 million metric tons during October, which was up 21.5% from a year earlier. However, 83% of China’s October imports came from South America, with imports from the U.S. totaling only 290,000 metric tons (10.65 million bushels). U.S. soybean sales to Europe also continue to lag badly, mostly because European Union nations continue to buy from South America. The window for U.S. export sales has been cut short as the new South American harvest should start reaching the market by late March.

Editors note: Richard Brock, The Corn and Soybean Digest's Marketing Editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.

To see more market perspectives, visit Brock's Web site at www.brockreport.com.