Export sales data from the U.S. Department of Agriculture (USDA) over the past few weeks has continually shown corn purchases from “unknown destinations.”
Last week, the USDA reported that private exporters sold 902,900 metric tons (MT) of corn to unknown destinations during the week ending Oct. 10. That was the largest weekly volume since the 2011/12 season. By last Friday, the USDA reported another 756,192 MT sold to unknown buyers in flash sales alone, which will show up in this week’s data.
Additionally, last week’s data brought total outstanding sales for unknown destinations up 131 percent compared to the same week last year.
So, who are the unknown buyers? The USDA won’t attach those sales to a country until the company that sold the bushels defines the recipient. Federal regulations require exporters to reveal the country, though companies can report the destination as “unknown” if the destination has not been specified. Exporters must declare the destination before the intended bushels are exported. Eventually, the sales will have a destination linked to them.
China has been bounced around as a hopeful. However, China’s corn imports have declined as their stockpiles rose to a three-year high, leaving even Brazil’s corn in the dust. Mexico has been the shining star for U.S. corn exports. Weekly export sales reports showed that some sales sometimes switched from unknown to Mexico. The country’s significant demand for U.S. corn could lead to more sales to unknown on the weekly sales sheet.
Meanwhile, other regular buyers, such as Japan and the Netherlands, are labeled as unknown before exporters return and assign a destination. During the week ending Oct. 3, nearly all of Japan’s purchases of 194,100 MT were switched from unknown destinations. Japan is a likely contender, given that its outstanding sales for the current marketing year are up 46 percent. Japan imports corn predominantly from the United States and Brazil and switches between them seasonally based on prices.
Lastly, the key could be corn prices sitting near $4, a bargain level relative to the last inflationary cycle. The U.S.’s diverse buyers list at a time when corn demand is improving could make way for more frequent sales to unknown buyers before the destination is established.
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