More flash sales to China this morning, reported below by USDA-FAS (Foreign Agricultural Service). Big numbers of soybeans! Have you wondered why Chinese buyers were absent earlier this spring after signing the Phase 1 Interim Trade Deal Thingy (political dog & pony show) but it wasn’t until US/China relations actually deteriorated this summer that the export sales started to ramp up? 2 things here:
1) Private Chinese crushers are actively importing US supplies in anticipation of higher tariffs later because US/China relations are worsening. There is an import margin today and they want to take advantage of it before politicians screw it up. The corollary action for a US farmer might be to actually commit to selling some bushels here! Check the Pro section of the Croptomize app to get up to speed on where our digital farm is on 2020 sales.
2) Brazilian harvest was in the spring! This seasonally weakens South American basis making Brazil super competitive relative to US supplies. The Chinese also have shown a commitment to investing in this trade relationship and buying up volume at SA harvest time.
today’s trade details below:
Private Exporters Report Sales Activity for China and Unknown Destinations
WASHINGTON, July 16, 2020–Private exporters reported to the U.S. Department of Agriculture the following activity:
–Export sales of 522,000 metric tons of soybeans for delivery to China. Of the total, 132,000 metric tons is for delivery during the 2019/2020 marketing year and 390,000 metric tons is for delivery during the 2020/2021 marketing year; and
Export sales of 351,000 metric tons of soybeans for delivery to unknown destinations. Of the total, 65,000 metric tons is for delivery during the 2019/2020 marketing year and 286,000 metric tons is for delivery during the 2020/2021 marketing year
The marketing year for soybeans began Sept. 1.