US soy shipments fall off pace despite decent demand -Braun

Recent U.S. soybean export sales have been respectable, though soy shipments have dropped off normal pace in the latest couple of weeks in a way not seen since the U.S.-China trade war in 2018.

This does not necessarily mean the U.S. export program is in jeopardy as this year’s bar is already relatively low, though drought-related delays in Panama Canal traffic could be a major stumbling block as they could last well into 2024.

Data released by the U.S. Department of Agriculture on Monday showed 984,410 metric tons of U.S. soybeans were inspected for export in the week ended Dec. 7, a 10-week low and the week’s lowest since 2018.

Export inspection data is a proxy to actual shipments and is often subject to revision, but the data is the first such information available each week and provides insights on activity at various U.S. export hubs.

USDA sees total 2023-24 U.S. soybean exports at a four-year low and down 12% on the year, and as such, soybean inspections have lagged normal levels for nearly two months.

But the latest two weeks have been anomalous with soybeans accounting for about 43% of all inspected grains and oilseeds, well below the average level of around 60%. Other than 2018, that share had not dipped below 50% during these weeks in any other recent year.

Delays at the Panama Canal could directly impact U.S. Gulf exports as the passageway is a key route to Asia. Additionally, unusually low water levels on the Mississippi River have hampered barge movement toward the U.S. Gulf both this year and last year.

However, inspection data does not yet suggest soybean volumes at the Gulf have deviated significantly from prior bounds. Gulf ports accounted for 49% of all U.S. soybeans inspected in the week ended Dec. 7, identical to the same weeks in 2022 and 2017 but below the average of around 56%.

Pacific Northwest ports have not picked up any of the slack, accounting for 29% of all soybeans inspected last week, even with the week’s average.

From a sales perspective, U.S. soybean export projections are not glaringly overstated. As of Nov. 30, some 68% of USDA’s full-year target had been sold, similar to the same dates in the last two years.

But it is interesting to note that the volume of unshipped soybean commitments actually rose during November, the first such instance since 2007, as well-above average monthly sales combined with leaner shipments.

Both the volume of outstanding soybean sales and the ratio of cumulative exports to total sales are still within normal range, so last month’s odd trend is not yet alarming. But it could be worrisome if the unshipped ledger continues to grow without a matching effort in shipments.

U.S. grain vessels have been increasingly using the Suez Canal route to Asia instead of the Panama Canal, adding up to two weeks in delivery time and increasing costs, potentially placing U.S. soybean orders at risk of cancellation in favor of upcoming Brazilian supplies.

Karen Braun is a market analyst for Reuters. Views expressed above are her own.

Tags: soybean, USA