The corn condition in the US that is currently rated good or excellent is 60% of the crop. That is slightly below the year-ago rating of 62%, however, ratings for corn dented and corn mature are slightly ahead of last year, at 60% and 11% respectively. Recent rains across several of the dryer portions of the corn belt were described as enough to finish the crop, and corn could be finished about a week ahead of normal. That could eventually lead to strong loadings in the fall.
Corn exports bottomed in 2019 in September at 1.17mn Mt, and last year in October at 2.7mn Mt. Loadings were 1.81mn Mt last month, which was down from 3.37mn Mt a year earlier. Given the damage from Gulf Coast export terminals, loadings could be on the light side in September, but potentially rebound nicely in October and November.
Hurricane Ida appears to have tracked to the east of most crop growing areas in the Mississippi Delta region, and yields on corn and beans from those areas are expected to be fairly good. Getting them to market, however, may be difficult. Several grain elevators in the region are reporting damage to their infrastructure, which could limit exports for the next several weeks. As yet, there still has not been an export of corn, wheat or soybeans since August 26, when one vessel each departed Baton Rouge and New Orleans. The hurricane made landfall on August 29.
US grain exports are typically low at this time of year already, but the passage of Hurricane Ida over southern Louisiana and the Mississippi River is limiting exports even further. Nearly 50% of the approximately 301,334 Mt of waterborne corn, wheat and soybeans loaded in the US so far this year, have originated from the ports of New Orleans and Baton Rouge.
The last loadings from those two ports were made on August 26, which was three days before the storm made landfall on August 29. Baton Rouge loaded the Supramax Guma, with 20,396 Mt of corn and 4,682 Mt of soybeans. New Orleans last loaded 3,563 Mt of wheat aboard the Handymax Ocean Joy. Being the low season for grain loadings could be giving shippers a break, as shown by subdued loadings at smaller ports along the Mississippi prior to the storm. Destrehan last loaded 4,948 Mt of corn on August 21 and St. Rose loaded 3,563 Mt of wheat on August 20.
It is not clear when the Mississippi River will be cleared for shipping or when next loadings will be made. Parts of the river are blocked by barges that broke away from docks, or by power lines which fell into the river.
US wheat exports are below average so far this month, registering a daily pace of 29,770 Mt/d. That is down 49% from July, and 57% lower than the same month a year ago. Exports are 687,166 Mt on an absolute volume basis, which is down sharply from the 2.14mn Mt exported a year ago.
The seasonal pattern in US exports shows some strength in the months between April and June, although it depends on the size of the hard red winter crop. Much of the weakness this month has been the result of less availability of HRW wheat, where the loading pace is currently 7,306 Mt/d versus 21,898 Mt/d in July.
Hard red spring wheat may be in better shape, where the USDA shows 77% of the crop currently harvested. That is above the average of 55% and could help boost exports in weeks to come. HRS exports are currently 11,350 Mt/d, and down slightly from 14,378 Mt/d in July. They were 23,566 Mt/d a year ago.
Increased US exports are needed to satisfy global demand, as Russian exports are still hampered by the ongoing export tax. The EU is in good shape, as yields are currently 4.8% above a year ago, and exports are up 7% from a year ago to 64,298 Mt/d.
It is still early in the month, but daily discharge rates of wheat in the Middle East and North Africa are showing seasonal strength. The region’s wheat imports are running at a pace of 66,437 Mt/d so far, which is up 93% from July. The pace for the month is down 26.8% from the same month last year, but up 20% from August 2019. In those years, August gained 165% and 73% respectively compared to the month prior.
Discharges in Egypt are up more than 240% so far compared to July, to a pace of 19,652 Mt/d. Tunisia is up 310% to 6,810 Mt/d, albeit from a smaller starting level. The increased deliveries are coming from the consistent suppliers of Ukraine and Russia, whose deliveries to MENA are up 73% and 200% respectively.
Between 2018 and 2020, Russian wheat exports reached their lowest point of each year during the month of June, and were followed by strong rebounds in July and August. This year, however, a low point was reached in May at 219,069 Mt, and was followed by a rebound to 1.49mn Mt in June. The rebound normally seen in July has, this year, seen loadings fall slightly from June, to 1.16mn Mt. June loadings were likely brought forward from July, and played a role in the July decline.
Combining June and July this year yields a result of 2.65mn Mt, which is only slightly below the combined result of 2.72mn Mt in June/July of 2020, and 2.87mn Mt in June/July 2019. While this year’s exports are lower compared to recent years, they come amid the new Russian tax on exports, which began in mid-February, and was made permanent in mid-June. The tax was implemented in order to bring down Russian domestic food prices. Export data from June and July, however, would argue that the impact of the tax has been minimal so far.
Ukrainian wheat loadings usually begin to pick up in July. Although this year is following that pattern, loadings have been slightly below normal. July wheat loadings rose 25% compared to June to reach 1.33mn Mt, but were 26.5% below July last year. This month’s loadings total 1.12mn Mt, with two-thirds of the month left to go. Interpolating the pace through month-end would project around 3.36mn Mt for the full month, which would fall short of the 4.73mn Mt loaded a year ago.
Poor weather during the harvest is pushing domestic prices higher and could be hampering exports. It is uncertain whether that will last, however, as the Ukrainian government is forecasting a larger crop this year compared to last year.
Soybean meal exports from Argentina fell 5.6% in July from June, to reach 2.33mn Mt. June had advanced to the highest so far this year at 2.47mn Mt, and surpassed the June 2020 peak at 2.46mn Mt. The highest on our records was reached in July 2019 at 2.89mn Mt. Argentina’s agricultural loadings were weighed slightly in July by low water levels in the Parana River, and by the drought that occurred during the growing season.
Brazil’s soymeal exports increased 35.4% in July to 1.83mn Mt, but remained below the May high at 1.99mn Mt. The highest on our records was reached in May 2020 at 2.15mn Mt. The seasonal peak in exports from Brazil typically occurs in May, before settling toward a low point between November and February.
Argentina’s grain exports made a respectable showing in July, despite environmental issues faced by growers and shippers. There were 3.29mn Mt of corn loaded during the month, which was down 8.4% from a year ago. Wheat exports rose 129% to 501,711 Mt, while Soybean loadings declined 24% to 707,844 Mt. Combined loadings of all three crops were 4.5mn Mt, and were down only 5% from a year ago.
Freezing temperatures combined with drought conditions hampered crop growth, while the drought also contributed to the ongoing low water levels in the Parana River. The low river levels have prevented shippers from departing with fully laden vessels. The river originates in southern Brazil, and crops from both countries have been hampered this year by the drought.
Final data on Brazil’s corn exports in July show a small acceleration at month-end, but still a weak showing compared to prior years. They totaled 1,222,763 Mt, or a daily rate of 39,446 Mt/d. That compares to figures a year ago of 3,731,785 Mt, or 120,382 Mt/d.
As expected, the impact from the late planting and frost at the end of June weighed on loadings. That would normally be expected to boost prices, however, signs that the US crop is performing well are keeping corn futures prices subdued.