Grain Spreads: Inspection Release
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Commentary
The USDA to my surprise released the weekly grain export inspections report. Apparently, they are mandated by Congress, but all other reports remain shut off due to the shutdown. U.S. corn export inspections for the week totaled 63 million bushels with analysts expecting between 55.1 and 65 million bushels. Current year values are much higher than last year (37.2 mil bushels) and the 5-year average (32.0 mil bushels). Mexico continues to be the top destination with the country taking 18 million corn bushels this week. Mexico in my view needs more corn to feed the cattle locked in Mexico due the screw worm U.S/Mexico border shutdown. U.S. soybean inspections were also at the top end of analyst expectations at 28.2 million bushels vs. 22-29.4 million bushels expected. Seasonally, export inspections pick up drastically during the month of October. We did not see that seasonal progression this week as China remains absent. Current week inspections at 28.2 million are much lower than 59.7 million bushels seen last year and the 5-year average of 74.6 million bushels. Mexico was the top destination for soybeans this week taking 8 million bushels. Inspections for wheat came in firm at 18.6 million on the week. In my view strong wheat shipments continue to keep inspectors busy. Wheat export inspections to date a third of the way through its marketing year exceed the seasonal pace needed to hit USDA's target by 39 million bushels. All three markets closed near unchanged in a low volume, low volatility session which has become all too familiar lately.
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Sean Lusk
Vice President Commercial Hedging Division
Walsh Trading
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