While other factors will influence corn and soybean prices over the next few months, particularly South American weather and crop conditions, a continuation of the current slow pace of export sales would limit price rallies, said a University of Illinois Extension marketing specialist.

"The first quarter of the 2005-06 marketing year for corn and soybeans was characterized by a fairly slow pace of exports," said Darrel Good. "The slow start, along with the level of outstanding sales, may result in smaller projections for the year in the USDA's monthly report of supply and consumption prospects to be released on Dec. 9."

Corn exports were reasonably large, at 498 million bushels, during the first quarter of the 2004-05 marketing year, but were soft during the last three quarters of the year, Good noted. Exports for the year totaled only
1.814 billion bushels.

For the 2005-06 marketing year, the USDA currently projects U.S. corn exports at two billion bushels, the most in 10 years and 180 million above the average exports of the past nine years.

"An expected decline in exports of corn by China accounts for most of the optimism about U.S. corn exports," said Good.

For the current year, Census Bureau estimates of U.S. corn exports are currently available only for September. USDA export inspection estimates (reports released on Mondays) are available through Dec. 1, and the estimates from the USDA's Export Sales report (released on Thursdays) are available through Nov. 24.

Cumulative inspections though Dec. 1 were estimated at 460 million bushels, said Good. For September, the Census Bureau estimate exceeded inspections by 8.3 million bushels and exceeded shipments by 3.8 million bushels.
Through Nov. 24, the export shipping estimates exceeded the inspection estimates by 7.5 million bushels.

"Considering all current information, corn exports during the first quarter of the 2005-06 marketing year-- September through November--likely totaled about 485 million bushels, just slightly less than during the first quarter last year," said Good.

"To reach the USDA projection of two billion bushels for the year, shipments during the last three quarters need to total 1.515 billion bushels. That is 200 million, or 15 percent, more than exported during the same nine months last year."

Good added that weekly shipments during the last 39 weeks of the marketing year need to average about 38.85 million bushels per week compared to the average of 36.9 million to date. As of Nov. 24, the USDA reported that 305 million bushels of U.S. corn had been sold for export but not yet shipped.

"That compares to unshipped sales of 351 million bushels on the same date last year," said Good. "The pace of exports and export sales this year is slower than that of last year for Japan, Egypt, and 'unknown' destinations.
The good news is that export commitments to other major buyers--Taiwan, South Korea, and Mexico--exceed those of last year. The large sales to South Korea and Taiwan may indicate that Chinese corn is not as readily available as last year."

U.S. soybean exports during the first quarter of the 2004-05 marketing year were huge, at about 406 million bushels. Shipments were 20 million bushels larger than the previous record for the quarter established the year before.

"Those large exports reflect aggressive buying by China following the shortage of soybeans during the 2003-04 marketing year," said Good. "Shipments were modest during the second and third quarters of last year and were weak during the final quarter--summer 2005.

"For the year, U.S. exports were a record 1.103 billion bushels, 39 million above the previous record of 2001-02."

For the current marketing year, the USDA projects U.S. soybean exports at 1.075 billion bushels. Export inspections from Sept. 1 through Dec. 1 totaled 316 million bushels. For September 2005, the Census Bureau estimate of U.S. soybean exports exceeded USDA estimates by about three million bushels. Through Nov. 24, USDA's estimate of cumulative export inspections exceeded the estimates in the weekly Export Sales report by three million bushels.

"Available estimates suggest that U.S. soybean exports during the first quarter of the 2005-06 marketing year--September through November--totaled about 330 million bushels, 76 million less than shipments of a year earlier," said Good.

"To reach the USDA's projection of 1.075 billion bushels for the year, exports during the last three quarters of the current year need to total 745 million bushels, an average of 19.1 million per week. Recognizing the sharp seasonal decline in export shipments during the spring and summer, weekly exports need to be much larger than that average during the winter months. The total needed is 48 million, or 7 percent, more than was exported during the same period last year."

As of Nov. 24, the USDA reported that only 144 million bushels of U.S. soybeans had been sold for export, but not yet shipped. Unshipped sales a year earlier totaled 231 million bushels.

"Total export commitments--shipments plus outstanding sales--to the European Union and China, the two largest buyers of U.S. soybeans, are running 41 percent behind the pace of a year earlier," said Good. "In addition, unshipped sales to 'unknown' destinations totaled only 22 million bushels as of Nov. 24, compared to 66 million at the same time last year.

"Of the major buyers of U.S. soybeans, only Mexico has purchased more U.S. soybeans than at this time a year ago."

By Bob Sampson, PhD