Arable farmers in the United States are heading for a good harvest of grain corn and soybeans this fall. Before it can be stored, the silos and storage areas containing last year's product must first be emptied. The export pace has completely collapsed, causing the market to fall into a negative mood.
In the last full week of July, the US shipped significantly less corn and soy meal, according to figures from the USDA. Export companies have to contend with fierce competition on the global market, a relatively strong dollar and geopolitical tensions on the world stage. One third of all American grain corn is still in grain silos.
Much more wheat
Through July 25, 286.600 tons of wheat were also shipped, which is 7% less than a week earlier and 41% less than the four-week average. Indonesia and the Philippines are the largest buyers of this wheat. The wheat export season – which started June 1 – stood at 25 million bushels on July 305,5. A year earlier that was 214,7 million bushels.
Exports of grain maize halved at the end of July and are even 60% lower than the four-week average. The export season is in its last month and is well underway. 2,17 billion bushels were exported, compared to 2022 billion bushels in the 2023-1,51 season. Soybeans are doing relatively well in the export figures, with transit ports Germany and the Netherlands as the largest buyers. Total exports are behind, with 1,67 billion bushels versus 1,93 billion a season earlier. The figures for soy meal were 83% lower at the end of July than a week earlier. Exports of soy oil even dropped almost to nothing.
Despite a negative vote, the CBoT still managed to squeeze out a plus for corn and soy on Thursday, August 1. The September contract (new crop) closed slightly higher at $3,82 per bushel. Both old and new crop soybeans also showed a plus of 30 and 65 cents.
Busy remains
Analysts assume that the pressure on the market will not decrease because the remnants of the old harvest will put pressure on price formation. This means corn will fall below $3,50 and soybeans will fall below $10. In addition to an oversupply, the market also has to deal with good harvest expectations for the new harvest and pressure from other export countries, especially in South America.
The situation is less rosy in neighboring Canada. Especially in the west of the country, drought and heat mean that yields of wheat, among other things, are estimated to be lower, although the harvest has yet to start. For the EU, market agency Strátegie Grains has lowered its wheat yield forecast to 117,5 million tonnes. That is 7,6% less than in 2023, when 127,2 million tons were harvested.