Esse texto é de autoria de Angie Setzer, consultora de Grãos da Marex US.

O Footnotes é postado todo sábado no portal Brz Report (plataforma da Agrinvest onde você encontra basis, trades, fluxo das commodities, preços do mercado físico, cobertura da China e muito mais).

Grain and soybean exports have been a focus of conversation for the past year both inside agriculture and out. From dire forecasts of demand destruction to promises of the best trade deals farmers have ever seen, the amount of grain leaving the country has been a hot topic.

This week, I want to take a close look at corn, wheat, and soybeans by digging into their current export pace.  We’ll also discuss grain flow around the world and what could influence movement in the months ahead.

Between farmer selling pace, currency shifts, biofuel demand growth and tariffs, there are a lot of moving pieces making this year even more volatile than usual. Taking all that into consideration, we’ll see what it could mean for the balance sheet and global flows.

Corn

Our current corn export book is the largest we have ever had at this point in the year, outpacing the previous record by nearly half a billion bushels. We have sold 2.27 billion bushels of corn so far. This leaves us with just under 24 mmt or 929 million bushels left to sell this year to meet the most recent USDA projection of 3.2 billion bushels.

Since the start of the marketing year, there has been plenty of discussion about whether the lofty USDA demand projections are attainable. Some have even called the aggressive sales pace ‘front-loading.’ However, that argument loses traction when looking at outstanding sales, which remain relatively low. As of this week, there is an additional 3.2 mmt left to be shipped this year, this in a book that is 14.4 mmt larger.

With just under 31 weeks remaining in the marketing year the US needs to sell around 760,000 metric tons or just under 30 million bushels per week to meet the current USDA export projection.

When looking at world corn supplies and availability that pace feels like a very attainable target, one we may even exceed. Breaking down our biggest world corn suppliers shows the US as the primary source until at least April, when Argentina comes back meaningfully to the world corn market.

Ukraine still has some availability to send supplies to world buyers as well but is not only struggling with war induced infrastructure challenges, but traders are also seeing issues with quality. Quality problems and problematic regional flow have also limited the movement of grain out of the EU.

This means limited global competition will remain the story until Argentina can get their supply into the pipeline. This makes everything a bit more interesting as Argentina’s crop size begins to be trimmed, drifting further away from the high-end estimate of 63 mmt by the day. While supplies will still be large, there will be some interesting dynamics in play when it comes to farmer selling and the movement of grain.

Trained to wait for a tax break or special program, Argentina farmers do not move grain into the market as many farmers elsewhere do. This creates a new dynamic for exporters when it comes to the comfort level of offers they are making into the world market. As it stands currently, farmer selling of corn in Argentina is slower than the crop size and market conditions would suggest, giving exporters pause and keeping offers firm.

The majority of Brazil’s corn crop will be planted in February, with wet conditions potentially causing some issues. However, traders are still expecting the second largest overall corn crop on record as we head into their production season. Booming ethanol demand will keep much of that corn closer to home than seen in the past, with many expecting relatively flat export figures year over year out of Brazil.

In the end, for corn, with a lack of aggressive competition from the world’s main suppliers, the US should be able to meet if not exceed the current USDA export target. While I may wait a week or two to confirm, it appears we could likely bump our overall export projection higher by another 100 million bushels or so. I would like to say we could go even beyond that but feel we may struggle logistically to do so.

Continue reading in the: Friday Footnotes