Soy Export Sales Remain Large
- Soybean export sales were very strong in the week ended October 8 at 96.7 million bushels, which was well above market expectations.
- Soybean sales in the 2020/21 marketing year have been above 90 million bushels in each of the first six weeks.
- China bought 44 million bushels of beans, bringing their official purchases to to 870 million bushels.
- Corn export sales were less than expected, coming in at a disappointing 25.8 million bushels, which were the lowest of the season to date.
- Wheat sales were nearly unchanged from the previous week at 19.4 million bushels, and were near the top end of market expectations.
- Upland cotton sales of 98,900 running bales were down 45% percent from the previous week and 61% from the prior 4-week average.
FBN’s Take On What It Means: Total soybean commitments are record large this marketing year at 1.6 billion bushels versus 656 million at this time last year. Sales only need to average approximately 14 million bushels per week for the remainder of the crop year to meet the last USDA projection of 2.2 billion bushels. To date China has purchased 70% of the total versus 21% a year ago, and is on pace to exceed its record annual imports from the US of 1.326 bushels. FBN looks for strong exports to continue to support prices.
China Q3 Pork Production Higher
- China's third quarter pork production increased 18% from a year earlier to 8.4 million tonnes.
- It was the first quarter since Q3 of 2018 to show a year-on-year increase in pork production.
- The African Swine Fever outbreak reduced China’s hog breeding stock by an estimated 60% by late last year.
- Pork output fell to a 16-year low of 42.6 million tonnes in 2019.
- Production in the first nine months of 2020 dropped less than expected, down 11% from a year earlier to 28.38 million tonnes.
- October hog slaughter is projected to be up 8% from last month to 24 million head, but would still be short of the 45 million needed to meet demand.
FBN’s Take On What It Means: The data indicates the start of recovery, although the large percentage rise in the third quarter was versus a very weak quarter in 2019. The number of breeding sows is reported to have increased to close to levels prior to swine fever. However, pork supplies in China remain tight and continued herd expansion is expected to support feed demand and in turn help world prices.
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