China Halfway To Promised 12 MMT Of US Soybean Purchases

By Ryan Hanrahan

Bloomberg’s Hallie Gu, Isis Almeida, and Michael Hirtzer reported that “China has secured at least 7 million tons of US soybeans after heavy buying in the past two weeks, passing the halfway mark toward meeting its 12-million ton purchase agreement with the Trump administration, according to people familiar with the deals.”

“The tally follows a wave of buying from Sinograin, the state company in charge of managing China’s strategic grain reserves. The stockpiler booked about 2 million tons from the US last week, according to the people,” Gu, Almeida and Hirtzer reported. “That has continued this week, with purchases of at least seven soybean cargoes, or more than 400,000 tons, they said.”

“The appearance of Sinograin in the market, which adds to deals booked by state-owned firm Cofco, could ramp up the pace of China’s imports. The purchases also are coming as the Asian nation was auctioning large volumes of soybeans from state reserves to clear space for the incoming cargoes,” Gu, Almeida and Hirtzer reported.

“The pace of buying has been opaque. Officially, the US Department of Agriculture has reported less than 4 million tons of soybeans sold to China, but the total has been widely considered to be higher. The US government shutdown has also delayed weekly export sales data, keeping some of the purchases by China under wraps,” Gu, Almeida and Hirtzer reported. “Additionally, US exporters have sold nearly 3 million tons of soybeans to unknown destinations through Nov. 20, according to USDA data. Such cargoes can see their destinations changed to China at shipment.”

“Ultimately, sellers in the US and buyers in China expect the target to be met, but murkiness on exactly when the supplies will ship — coupled with an expected record Brazilian harvest in the next few months — means that prices remain under pressure,” Gu, Almeida and Hirtzer reported.