US Soybean Ship Lineup Highest This Season, Thanks to Sales to China.

Feb 8, 9:22 am | AgResource Plus | Share this:

Summary:  Next week ’s soybean export inspections are expected to be 975,000 MT (35.8 Mil Bu).   If this is correct, that would be nearly unchanged from the previous week.  This week’s ship lineup is 2,278,000 MT.  That is up 22% from last week and the highest for this season.  Also, this week’s lineup is 20% larger than a year ago.  There were 32 vessels to-be-nominated (TBN).  That is unchanged from last week but is the 3rd largest figure so far this season.

This past week there were 6 vessels that we could identify that departed for China.  In addition, the destinations of several vessels were unknown.  Also, there are 16 vessels in the lineup that are scheduled to depart for China in the next few weeks. News reports cited US and Chinese officials who said that China would purchase another 5 MMT of US soybeans (in addition to the 5 million purchased a month ago).  When the USDA issues its WASDE report today 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. News reports and industry sources indicate that some (all) of the 5 MMT that was purchased in the first round was crushed.  However, there is speculation that the second tranche will be used to replenish reserves.

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. As of Dec 27, US soybean export commitments were 24% below a year ago.  As of Jan 31, US export inspections were down 38%.  USDA projects that US soybean exports will be down 10.8% YoY.

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As of Feb 07, there were 2.278 MMT identified in the US vessel lineup that were scheduled to load soybeans.  That is up 22% from last week’s lineup (see chart below).  Also, there were 32 ships in the lineup for which there was no tonnage, destination, or commodity cargo noted.  This is unchanged from a week ago but is the 3rd largest number of vessels this season.  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 32 vessels that were TBN this year.  That is unchanged from last week but it is 1 more than a year ago.

 

 

We can document that 920,000 MT of soybeans that 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 55,000 MT to our estimate to bring the upper end of our estimate to 975,000 MT.  We expect that “actual” inspections will be at the high end of this range.  Therefore, we project next week’s inspections will be 975,000 MT.