(Agrimoney) – US corn exports, running only marginally ahead of year-ago levels, are poised to accelerate even as soybean shipments slow, the head of Archer Daniels Midland said, in comments which also revealed a China effect in boosting prices of distillers’ grains.
Juan Luciano, the ADM chief executive, acknowledged the threat to US soybean exports from the ramping up of South America’s harvest of the oilseed, which is now 7% complete in Brazil, ahead of the average 4% by now, according to Informa Economics.
“As the South American harvest continues we will see the seasonal decline in North American soybean exports,” Mr Luciano said.
The pace of US soybean shipments typically peaks around late November, before beginning a slide which accelerates in April as supplies from Brazil’s harvest reach port in earnest.
‘US is competitive’
However, the soybean slowdown will usher in a better period for shipments of corn, of which Brazil’s export supplies stem largely from the safrinha crop not harvested until later in the calendar year.
“We expect to see corn exports pick up starting with the Pacific Northwest and then moving to the Gulf,” Mr Luciano said, flagging the keen prices of US supplies against those from other origins, such as Ukraine.
“We expect the corn programme to pick up during the [January-to-March] quarter as the US corn becomes more competitive against European [origins] or Argentina.
“The US has come back and is competitive and we expect that to increase during the first quarter.”
Export results so far
So far in 2014-15, which started in September, the US has exported 14.94m tonnes of corn, compared with 14.61m tonnes a year ago.
The US Department of Agriculture sees US corn exports decreasing over the season, to 44.45m tonnes from 48.70m tonnes last year, implying shipments keeping up their current pace over the rest of 2014-15.
Soybean shipments have reached 37.47m tonnes so far, according to cargo inspection data, up from 31.53m tonnes a year ago.
Exports for the full 2014-15 are seen hitting 48.17m tonnes, up 3.35m tonnes year on year.
DDG prices
Mr Luciano added that ADM was, at its processing operations, factoring in corn costs proving “moderate or relatively stable” for 2015, meaning that margins this year in corn sweeteners and starches, for example, will be “approximately comparable to 2014”.
He also highlighted increases in prices of distillers’ grains [DDGs], saying that the reopening of China to US exports of the feed ingredient, which is derived from corn, was “already there” in terms of boosting values.
“China has been taking DDGs for probably a month already. So we have seen that increase. We feel good about it,” Mr Luciano told investors, in comments following ADM’s release on Tuesday of forecast-beating results.
