News

China returns to U.S. soybean market

Tommy Grisafi with Ag Bull Trading says China has been back in the market for U.S. commodities.

“The market just lowered the tariffs on China. Whether President Trump lowers the tariffs or not, the grains had a 20 percent off sale here in corn and wheat, and the beans are now really starting to sell off hard.”

On Thursday, the USDA says China bought 132,000 metric tons of U.S. soybeans, with 120,000 metric tons going to unknown destinations for the new crop marketing year.

An unknown purchase of old and new crop U.S. soybeans happened on Wednesday, which some traders thought could have been China, but that’s not been confirmed.

Grisafi says he’s not surprised with the buys. However, in the grand scheme of things, he says the purchases China has made so far are still below historical levels.

“Everyone makes a big deal that they even bought anything. They should be buying a lot of our stuff,” he says. “So we now get excited that we sold anything. It’s it’s kind of an interesting thing, but they are definitely not shunning us, not moving away from us. We are open for business.”

He says the purchases seem strategic, timed when the U.S. and Iran signed a memorandum of understanding on Wednesday.

“It would be the nod that ok, we’re all getting along better.”

Grisafi says export demand impacts profitability, and farmers with unsold new crop grain should make some decisions in the next few weeks.