News

U.S. soybean market awaits confirmation of China’s 12-million-ton purchase pledge

China has committed to purchasing 12 million metric tons of U.S. soybeans by the end of January, and market analysts continue to watch for confirmation China is buying.

Kristi Van Ahn with Van Ahn and Company says basis in the Northern Plains has started to improve, but that was happening before any trade framework was announced, due to poor yields and excitement surrounding the announcement.

“From like the widest point, beginning harvest to where it’s at now, you’ve seen it gradually narrow up like 25 to 30 cents in some locations, but it’s been gradual where I think that if you do see China come in, that’s gonna be like an overnight thing.”

Sam Hudson with Cornbelt Marketing says he’s watching USDA’s weekly export inspection reports.

“The problem you have right now still is going into this shutdown, we knew China wasn’t really looking for much in the October, November time slot,” he says. “If anything, you know the earliest you might see something would be late November into the December time frame. If the government stays shut down.”

The latest weekly update from the USDA says soybean export inspections continue to trail the last marketing year, because the lack of demand from China. But it has been another solid week for corn exports, and Hudson says…

“And that may allow us to do some counter seasonal soybean exports, but that would only be predicating on a South American production problem. Ultimately, Mother Nature is still where a lot of these markets are going to lie. We’ve just been shifting around to how much it matters to each country.”

Van Ahn says while China bought some U.S. soybeans last week, the country is back buying Brazilian soybeans for early delivery, because U.S. soybeans are now too expensive on the global market after the recent price rally.