Summary: Next week ’s soybean export inspections are expected to be 1,300,000 MT (47.8 Mil Bu). If this is correct, that would be up 20% from the previous week’s. This week’s ship lineup is 859,000 MT. That is down 35% from last week. This week’s lineup is 35% smaller than a year ago. There were 52 vessels to-be-nominated (TBN). That is up from last week and is the largest number of vessels that were TBN in over 3 years.
This past week there were four vessels that we could identify that departed for China. In addition, the destinations of two vessels was unknown. Also, there are 2 vessels in the lineup that are scheduled to depart for China in the next few weeks. News reports cited traders who say that China has purchased 5 MMT of US soybeans. When the USDA issues its next WASDE report it is expected to adjust its projections for US soybean exports and China’s imports. The key to possible changes in the next set of S&D projections is what assumptions USDA makes about the soybeans that have been purchased by China. Will the recent purchases by Sinograin be added to strategic reserves or will they be consumed by state-owned-enterprises?
Another factor is what assumptions the USDA will make regarding the continued imposition of a 25% tariff on the import of US soybeans. It seems unlikely that USDA would sharply increase China’s soybean imports without the lifting of the tariffs. Lastly, it may be too late to pencil in the customary US exports to China. Brazil has already started to harvest soybeans and is expected to have the second largest crop ever. Cumulative US soybean export inspections are 40% below a year ago. USDA is projecting marketing year exports to decline 11%.
As of Jan 17, there were 859,000 MT identified in the US vessel lineup that were scheduled to load soybeans. That is down 35% from last week’s lineup (see chart below). However, there were 52 ships in the lineup for which there was no tonnage, destination, or commodity cargo (TBN) noted. This is the largest number of “un-assigned” vessels in over 3 years. The more vessels that are listed as “TBN”, the more difficult it is to accurately estimate the export lineup for soybeans.
The chart below plots the 2018/19 ship lineup vs the last two years.
The chart below plots the 2018/19 number of vessels TBN vs the last two years. There were 52 vessels that were TBN this year. That is up 22 from last week and is 44 more than a year ago.
We can document that 1,150,000 MT of soybeans were shipped last week. However, we cannot account for the cargo and destination for 3 vessels that were in last week’s lineup but not in this week’s. Therefore we have added another 150,000 MT to our estimate to bring the upper end of our estimate to 1,300,000 MT. We expect that “actual” inspections will be close to the high end of this range. Therefore, we project next week’s inspections will be 1,300,000 MT.