 Hello, this is Fray Nolson, crop economist and marketing specialist with NDSU Extension. This is the weekly soybean market update for the week of November 12th through November 18th of 2018. This week we're going to take a little bit deeper look into who is importing U.S. grains. This is the graph of the accumulated export sales for soybeans. Normally when I present this information on export sales, I do it week by week so how many bushels of soybeans have we sold or contracted for sale each week during the marketing year? This represents the same information in a little bit different format. So here what we're doing is every time there's an export sales we add it to the pile of sales. So we'd like to see this pile of accumulated sales grow as quickly as possible. And as you can see, we've talked about this before, the 2018-19 export pace is behind where we'd normally see at this time of year. I'd also like to point out the scaling of this graph on the left hand side. So the top value is 60 million metric ton. This will become important later on as we move on to the next slides. This is the graph of the corn export sales or accumulated corn export sales. You can see the shape is a little bit different, that we tend to have a little bit slower pace in the winter months and then that pace of exports tend to grow or expand a bit faster as we move into the summer months. And looking at the 2018-19 sales pace, relative to what we've seen historically, we're well ahead of where we have been at this time for the last several years. Also again, notice that the scaling on the left hand side is at 60 million metric tons. We're using the same scaling between corn and soybean export sales. The volumes are very similar, but the pace or the rate of export sales do vary by crop. Next, let's take a look at accumulated wheat export sales. Again, this would be for all wheat. It's not broken down by class, so wheat is wheat. As you can see, the accumulated export sales, the rate of export sales for wheat is relatively stable. It's more like a straight line. This signals that the amount and volumes that we sell during the winter months are very similar to the volumes that we sell during the summer months. As you can see, the red line, the 2018-19 accumulated export sales are behind what we'd normally see this time of year for the last couple of years. So we're having a little bit tougher time selling wheat into the international market, but export sales aren't horrible either. I also would like to point out the scaling on the far left hand side. The top scaling now is in 30 million metric ton versus the 60 million metric ton that we used for corn and for soybeans. So our total sales of wheat into the international markets on a volume basis are lower for wheat than they are for corn or for soybeans. Let's take a little bit more detailed look at who buys US wheat. This is a list of the top 10 US wheat importers, or the top 10 countries that purchase wheat from the United States. I'd like to focus on the column on the far right hand side. This is the three-year average of wheat purchases by country. If we look at these, we can categorize these into three major categories. We have the top category, which is really the top three countries of Mexico, Japan, and the Philippines. And again, they purchase approximately the same amount. Then we have this middle tier of countries, being Korea, Nigeria, Indonesia, and Taiwan. They purchase about half of the volumes that these top tier countries do. And then we have these lower tier countries, primarily China, Colombia, and Thailand. You notice that as we move down this list, the volume of sales drops off fairly quickly. So the point is that we have a relatively diverse set of countries that buy wheat from the United States. Even though we can categorize these into the different tiers, the volume of sales are relatively uniform over a broad spectrum of countries. As we shift to corn, this is a list of the top five buyers of US corn. Again, we can break these top five buyers into really three categories. If you look again on the far right hand side, the three-year average, we have the top two buyers, this top category of Mexico and Japan. We have this middle group, the two countries of Korea and Colombia. And then we have this third tier being Peru. And again, as we extend the list of these different countries, it drops off fairly quickly. So the point being we have, again, a fairly diverse set of countries that buy corn from the United States. But we can cluster these into the top category, the middle category, and the bottom category. I'd also like to highlight a few numbers on this table. In particular, the export sales of US corn into Japan and Korea. So if we look at the column on the far left-hand side, the 2018-19 YTD, YTD represents year to date. So this would be the amount of corn that we have sold, contracted for sale into Japan and Korea, starting at the beginning of the marketing year. So let's compare the column on the left to the column right next to it, which is the 2017-18 YTD. So this is the amount that has been sold this time last year. As you notice, the sales into Japan have increased 46% relative to the pace that we've had this time last year. And the sales into Korea have increased 353% relative to last year's pace. So our corn export sales into the Asian markets have been relatively strong this year compared to last year. As we look at the top five US soybean importers, we get a little bit different picture. On the far right-hand column, again, we have this three-year average. You can see that we can categorize these into really two buckets. We have China, which is the largest bucket. They have historically been our number one customer for US soybeans. Then we have this other group that's well below that, being Mexico, Indonesia, Japan, and the Netherlands. So again, the type of customers that we're selling soybeans to is very different. And the volumes are very different between soybeans versus corn and wheat. Once again, I'd like to highlight a few key numbers. As most of you know, our export sales of US soybeans into China have dropped off significantly. Export sales this year relative to this time last year were off 94%. Again, primarily due to the tariffs and import restrictions that China has put on US soybeans. There are several countries that have increased their purchase of US soybeans, primarily, again, because of the lower prices. The two I'd like to highlight would be Mexico and the Netherlands. If you look at the column on the far left-hand side, 2018, 19, YTD, or year-to-date, we can see that Mexico has increased their purchases by about 127% relative to this time last year. So again, we are selling more soybeans into the Mexican market. The other one I'd like to highlight is in the Netherlands. Now, it's scored as a Netherlands, but it really represents the EU or European Union. There's two major ports, Amsterdam and Rotterdam. The US soybeans, US grains, in particular, get offloaded and distributed then into the European market. So it's scored as Netherlands. But again, we've seen an 83% increase in our shipments of soybeans into the European market. But those sales volumes are much, much lower relative to what we'd normally see as an export pace into China. Now, let's shift our focus a little bit and look at the volumes of grain movements through our major grain exporting terminals in the US. These numbers represent the inspections of grain for export through the Pacific Northwest. So again, this would be grain that's been delivered and inspected and loaded onto a boat for shipment into the international markets. This is broken down by commodity. So if we look at the column on the far left-hand side, the 2018 YTD that's year-to-date, now this would be a calendar year calculation, not a marketing year calculation. So we're going from January 1 through December 31. So far, as of the beginning of November, our export inspections for wheat through the PNW are off a little bit from last year. We're down about 15% from this time last year. Notice, however, the corn shipments are up 71% relative to this time last year. Our soybean shipments are off 24% from this time last year. Again, this is a 12-month period, not a marketing year period. So there were some export shipments earlier on during the winter months moving through the PNW for the soybeans. The point is that the total volume of grain moved through the Pacific Northwest terminals this year, relatives of this time last year, actually a little bit ahead of the pace that we saw. Again, primarily due to higher export shipments or higher shipments of corn through those PNW markets. As we move to the Mississippi Gulf, so these would be the export facilities along the Mississippi River in the Gulf of Mexico, we see that wheat shipments are off a little bit from this time last year. Again, corn shipments are higher than this time last year, about 14% higher. And soybean shipments are about 10% lower. Again, I want to remind everybody this is for the calendar year, not the marketing year. So our total flow of grain through the Mississippi Gulf terminals are very, very close to what we saw last year. Periodically, I do get questions about what about the Great Lakes system? What about moving some of the grain through the Great Lakes rather than down to the Gulf of Mexico or into the PNW markets? And as you can see, the shipments of wheat through the Great Lakes system are up about 20% from this time last year. Corn shipments are up 133% from last year, this time last year. And soybean shipments are up about 34% from this time last year. So we are seeing some increased volumes through the Great Lakes system, but the total volumes are much, much lower. When we compare the 2018 year-to-date values of about 2 million metric ton through the Great Lakes system versus the PNW at 35.7 million metric ton and the Mississippi Gulf at almost 55 million metric ton, the volume shipped through the Great Lakes systems are much, much lower. So what does all this mean? These Chinese tariffs on US soybeans have had an impact. They've impacted not only total US soybean export sales, the total volumes that we're selling, it's also then impacted the volume of soybeans that are exported to other countries. As prices have come down, there are other countries that are buying US soybeans, but the volumes again are lower than what we typically sell into the Chinese market. But it's also had a shift in the flow of soybeans. Where the soybeans, how they move from the farm gate into these export terminals. Again, the export sales and the volumes shipped into the PNW markets have dropped off substantially for soybeans. There's been a shift then to more export sales and volumes of shipments through the Gulf of Mexico. But this also had a ripple effect then into the flow of corn and the flow of wheat, in particular again, from the farm gate into those export terminals, especially into the PNW. So as export sales or the volumes of shipments from the Northern Plains and the PNW markets for soybeans started dropping off, corn export sales started to pick up, the volumes of shipments into the PNW markets for corn increased. So total volumes through those PNW ports have remained relatively constant when you look at total throughput or total volumes. Local basis levels have also been impacted by not only the export volumes, but also the export destinations. So the countries that are buying US grains are also impacting then the flow of grain internally within the US system. So where is the grain need to be delivered to what export terminal, as well as how fast can that grain be exported or what's the throughput? Soybean basis levels, especially in North Dakota have been negatively impacted, primarily due to not only the slower delivery rates, but also the longer distances. So rather than delivering North Dakota soybeans into the PNW market, which has relatively fast throughput and relatively quick turnaround times for rail deliveries, we're now having to try and move North Dakota soybeans into the Gulf of Mexico markets. So the delivery rates, the volumes are slower as well as having longer distances impacting then local basis levels. In contrast, corn basis levels have remained relatively firm through harvest. Again, primarily due to the good export sales we've had in particular into the Asian markets, and those are then shipped through those PNW ports, again, having the higher throughputs and the higher turnaround times and the higher volumes. I will classify basis levels for wheat to be kind of average at this time of year. And there's really two kind of countervailing forces that are at play here. One of them would be the US export sales for wheat are a little bit behind what we'd like to see in a total sense, although there's been steady demand from the Asian markets. Again, primarily delivery points into that PNW marketplace. As we look forward in time, what do we expect to see happening to these basis levels? Or again, the basis being the difference between the local cash price and the futures price, and that basis really your local market trying to help regulate the flow of grain over time. So for soybeans, we are expecting soybean basis levels within the region to remain weak or more negative than normal until the Chinese purchases return. Again, that can be because of change in tariffs and or actually purchases of soybeans by the Chinese buyers. For corn, we're expecting the basis levels to remain firm during the winter months, but they may weaken as we get it after spring planting. So again, export sales for corn have been very strong. The Asian markets have been a major buyer of US corn. Those shipments out to the West Coast have been relatively fluid. So we do expect to see again basis levels remain firm, but once we get past spring planting and we start cleaning out the bins in mid summer, we may see some weakness, depending upon again, export pace and the flow of grain. For wheat, we are expecting to remain firm at basically the levels that we've seen today. They may strengthen or become less negative during the winter months. And there's two really, two things that are kind of competing against each other. One is stronger competition for world wheat markets. So there's a lot of competition in the world wheat markets. The US is having a little bit slower pace than we'd see typically at this time of year. But the supplies of high protein, milling quality wheat are very tight. So we may actually see some increased export sales of spring wheat relative to the winter wheat as we move into the winter months. Again, we need to be monitoring that very, very closely. This concludes this week's recording. Please feel free to contact me if you have any questions. Thank you for listening.