As we report on page six this week, international grain buyers, particularly corn buyers, are holding off purchases in the hope that large South American crops will become available early in 2013.
Canada’s grain exports are proceeding at a pace similar to last year with wheat, durum and barley running ahead of last year, canola about equal and peas, oats and flax trailing.
However, U.S. supply and demand have a greater impact on markets, and U.S. corn export commitments, which include outstanding sales and accumulated exports, have shrunk to a trickle.
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They total 10.74 million tonnes, only about half the pace of last year.
Because of the small crop, it was clear the U.S. would export less this year, but the U.S. Department of Agriculture forecasts a corn export decline of only 25 percent.
If the exceptional slow pace of exports continues, the USDA will have to revise its export number and likely increase its forecast for year end stocks, which would weaken prices.
Soybean export commitments to date total 25 million tonnes, up from 18.3 million last year, but last week’s sales were below expectations.
Wheat export commitments to date are 14.3 million tonnes, down from 15.9 million last year.
While markets will watch each weekly American export statistic for evidence of slowing demand, they will also monitor developing South American crops to see if they will be as large as expected.
At this point, the crop is still being seeded and there is lots of evidence that the soybean seeded area will increase.
The weather so far is a mixed bag.
Argentina and southern Brazil largely have adequate to excessive moisture.
Indeed, Argentine wheat crops, which are weeks from harvest, have been hurt by flooding and disease associated with excess rain. The rain is also delaying corn seeding.
Central Brazil, particularly top soybean producing state Mato Grosso, was dry in September. But in recent days it has had showers, and Brazilian forecaster Somar early this week predicted steady rain in west-central and northeastern regions in early November.
That should set Brazil on the right path to achieving the forecasted record 82 million tonne soybean crop, up from the previous record of 75.3 million set in 2010-11.
Argentina’s crop is forecast at 55 million tonnes, up from the previous record of 52.7 million set in 2009-10.
The USDA forecasts Brazil’s corn crop at 70 million tonnes this year, down from 72.7 million last year, and Argentina’s at 28 million, up from 21 million last year.
In other news, Ukraine last week said it would stop exporting wheat Nov. 15 to preserve grain for domestic needs after weather hurt production.
The news was not a big surprise, but it did support wheat prices for awhile.
The trade expects Russia will also be out of the export game by the end of the year. That should shift demand to North American exporters.
