(The opinions expressed here are those of the author, a market analyst for Reuters.)

NAPERVILLE, Illinois - Phenomenal export sales for U.S. corn and soybean oil as of late forced the U.S. Department of Agriculture on Tuesday to crank up its 2024-25 export outlooks.

The result? Record-low stocks-to-use for U.S. soybean oil and, against all prior narratives, smaller U.S. corn ending stocks than in the previous marketing year.

There is a chance soyoil exports must increase further despite the historically tight supplies, though the jury is still out on corn.

SOYOIL SURGE

U.S. soybean oil sold for export in 2024-25 totaled 416,356 metric tons as of Nov. 28, an eight-year high for the date. The marketing year began Oct. 1.

At least another 30,000 tons were sold last week, rendering USDA’s November peg of 2024-25 exports far too low at just 272,000 tons.

That forecast surged a whopping 83% in Tuesday’s update to 499,000 tons (1.1 billion pounds), a three-year high though well below the decade average.

The known sales already account for at least 90% of this target. Between 2014 and 2021, an average of 40% of the annual export volume was sold by the start of December.

While it may seem USDA took an overly conservative approach to the U.S. soyoil export boost, it could also imply that the agency expects the rare price discount of soybean oil versus rival palm oil to be relatively short-lived.

The palm oil production squeeze and subsequent price rally has been seen as a boon to soyoil exporters, but tight inventories could limit further upside to U.S. soyoil shipments. USDA’s latest figures put 2024-25 U.S. soybean oil stocks-to-use, a measure of supply versus demand, at 5.2%.

That is the smallest share in 61 years of records and down from 5.4% last year. Outright stocks of 683,000 tons are up slightly from the 2023-24 levels, which marked a 10-year low.

The United States a few years ago was the No. 3 exporter of soybean oil and accounted for 10% of global exports, though it is set for a 4% share in 2024-25.

CORN CONTRACTION

Back in February, preliminary USDA estimates showed 2024-25 U.S. corn ending stocks surging 17% on the year to a multi-decade high of 2.532 billion bushels.

Fast forward to Tuesday, U.S. corn ending stocks for 2024-25 are projected at 1.738 billion bushels, down 1% from 2023-24.

Most of that legwork came from a 19% dive in 2023-24 ending stocks since February. But the supply shrinkages in both 2023-24 and 2024-25 owe to better-than-expected demand rates as corn prices dipped to four-year lows this year.

USDA’s 2024-25 corn carryout on Tuesday landed well below all analyst estimates and was driven by a 6% surge in exports to 2.475 billion bushels. That would be the second largest volume on record behind 2020-21, a year significantly boosted by Chinese purchases.

China has not bought any U.S. corn for 2024-25, which began Sept. 1. However, some market watchers worry trade with top corn buyer Mexico could be at risk from potential tariffs once U.S. president-elect Donald Trump takes office.

USDA appears to have left some upside room in the corn export estimate given that total sales as of late November covered an above-average share of its new forecast.

U.S. corn used for ethanol also contributed to the supply slide on Tuesday, rising 1% to what would be a seven-year high after several weekly ethanol output records were notched last month.

The big declines in 2024-25 U.S. corn ending stock estimates come despite a huge record yield of 183.1 bushels per acre. But that number will come under scrutiny next month, potentially causing yet another shift in the corn balance sheet.

Karen Braun is a market analyst for Reuters. Views expressed above are her own.