China makes huge soybean buys late in season
China has bought a total of 3 million metric tons of United States soybeans in recent days, as Chinese importers shift their focus from Brazil to the U.S.
Record Brazilian harvests of its lower-cost soybeans had kept the Chinese active in that market. The strong U.S. dollar also dampened U.S. ag sales.
Confirmed sales to China as of late October were down 35% from a year ago, and sales to all destinations were down 28%.
China made its largest single-day U.S. soybean purchases in at least three months on Nov. 7, Reuters reported, citing traders who said the buy offered a “glimmer of hope” for a harvest season whose soybean sales had been below par. It was the biggest single-day soybean purchase by the world’s top soy importer since late July, according to U.S. Department of Agriculture daily sales data.
On Nov. 10, Bloomberg reported that China had bought a total of 3 million metric tons of U.S. soybeans over a two-day period.
The USDA is currently projecting a 12% year-on-year export decline for soybeans.
So is the big buy a sign of resurging Chinese demand that soybean farmers can rely on? At least some in the ag press don’t think so. AgCensus wrote that the buy “seems to be mostly driven by factors including the rebounding China-US relationship and logistical issues Brazil faces.”
San Francisco is hosting Chinese leader Xi Jinping and President Joe Biden at the Asia-Pacific Economic Cooperation summit meeting Nov. 11 to 17. It’s not uncommon for China to make goodwill gestures in advance of such meetings, including big ag buys. So this news, though welcome, may be a one-off.
David Murray can be reached at [email protected].