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China slow to honor U.S. soybean purchase commitments

The chief commodities economist at StoneX Group says there’s little evidence that China plans to follow through on its purchase commitments of U.S. soybeans.

Arlan Suderman says he believes China has agreed to purchase a U.S. soybeans, but “China seems to be very slow to want to admit to that, or to live up to it.”

China has purchased some U.S. soybeans this fall. On Friday, the USDA released a list of flash sales that happened during the government shutdown. China bought more than 12 million bushels of U.S. soybeans and there were several deliveries to unknown destinations. He says while positive, the purchase is less than 10 percent of China’s end-of-year commitment.

“They could still do it, but it’ll be a challenge to get them to do it, and they still haven’t even have a signed agreement yet. That tells me negotiators are still wrangling and fighting over the details.”

Suderman says Chinese demand is also flattening out, which isn’t good news for the U.S. producer.

“I’m hearing already from our customers in Brazil saying what are we going to do with all these soybeans we’re producing with demand in China flattening out?”

He says domestic demand will become important for the United States moving forward.