The interest in the export projections was generated by the rapid pace of export sales so far this year, particularly for soybeans. Through the first 23 weeks of the marketing year, soybean exports had already reached 81% of the USDA's January projection of exports for the entire year. Export commitments (shipments plus outstanding sales) as of January 30 accounted for 106% of that January projection. With year-ending stocks already projected at a very tight 150 million bushels, market participants were eager to see how the USDA expected to see exports, ending stocks, and price reconciled.
For corn, exports through the first 23 weeks of the marketing year had reached 42% of the USDA's January projection. Export commitments as of Jan. 30, however, stood at 91% of that projection. While year-ending stocks of corn will be ample, an increase in the export projection was expected to result in the third consecutive month of a smaller projection for those stocks and provide support for old-crop corn prices.
The interest in the South American production forecasts was generated by late-season weather issues that included excessive precipitation and flooding in parts of Argentina and excessive heat and dryness in parts of southern Brazil. Record-large soybean crops that would help alleviate the tightness in U.S. supplies during the last half of the 2013-14 marketing year have been expected for both countries. The projected size of the Brazilian crop was increased last month and the projection of year-ending stocks was increased for both countries. Smaller production projections this month could result in lower projections of stocks for one or both countries.
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Corn production in both countries is expected to be less than that of last year, particularly in Brazil, but large enough to maintain an ample level of stocks. The projected size of the Argentine crop was reduced last month and the projection of year-ending stocks was reduced for both countries. Even smaller crops, then, would point to a further drawdown in those stocks.
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