Bottom Line: In the Dec WASDE, the USDA lowered their projection for US soybeans by 25 Mil Bu to 2,225 Mil Bu (which would still be a record and 51 Mil Bu above last year). A simple “pace analysis” model suggests that US soybean exports may be several hundred million bushels lower than what USDA projects. Similarly, soymeal imports could be 5-6% smaller than USDA’s projection. Ultimately, the final size of US exports will mostly be determined by the size of the S. American crops. That won’t be known with some certainty for maybe another 3-4 months.
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US soybean export sales for 2017/18 rose by 64 Mil Bu and 2018/19 sales rose less than 1 Mil Bu. Sales were expected to rise by 48-66 Mil Bu. 2017/18 sales were up 20% from the previous week and were 34% above the prior 4-week average. As of Dec 14 export commitments of US soybeans were 1,458 Mil Bu (see blue columns in the chart below). That’s 274 Mil Bu (16%) less than a year ago (which was a record for this date). On average, as of this date, commitments account for 64% of final total annual exports (see dotted red line). This year’s commitments have accounted for 66% of USDA’s projected annual exports. However, in seven-out-of-the-last-eight years, commitments, as of mid-December, accounted for between 74% and 88% of final annual exports (see thick red line).
Pace analysis” compares export commitments to final annual exports (see chart below). For soybeans, we get a better fit of the data if we break up the observations into two time periods (1976-2004 and 2005-2017). The fitted regression for the years 2005-2017 suggests that USDA’s projection for annual exports is too high. The model projects annual exports of 1,765 Mil Bu vs USDA’s projection for a record 2,225 Mil Bu.
US soymeal 2017/18 export sales rose 184,100 MT and 2018/19 sales were down 26,000 MT. Sales were expected to rise by 100,000-300,000 MT. 2017/18 sales were down 60% from the previous week and were down 38% from the four-week average. The chart below compares soymeal export commitments to final annual exports (see chart below). The fitted regression for the years 2005-2017 suggests that USDA’s projection for annual exports is a bit too high. The pace model projects annual exports of 11,500,000 Tons vs USDA’s projection for 12,200,000 Tons (unchanged from last month’s projection).
