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Markets Are Mixed Overnight; US Markets Closed Thursday

Citing rising processing margins, some Chinese importers are looking to cancel US soybean cargoes

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Chinese Importers Could Be Cancelling US Soy Cargoes

  • Citing rising processing margins, some importers are looking to cancel US soybean cargoes for Dec/Jan shipment.
  • But the latest data from Reuters shows that margins have not substantially fallen and in fact have been rising over the month.
  • While some crushers could be realizing lower margins thanks to higher soybean futures, the industry as a whole is not likely to be suffering.
  • Further, a lot of these deals likely were made prior to the rising prices though some may not have been.
  • FBN’s Take On What It Means For The Farmer: We lean towards this being a move from China to work the market - or get the market to move lower if a lot of cargoes are cancelled. At the end of the day, China needs soybeans and the US has them now. It is not unusual for China to turn buying interest to South America as their crops develop. The bulk of Brazil’s soybean harvest will be in early 2020 (late January into February). Even if cargoes are cancelled, that does not mean China does not need the cargoes. Rather, it could be a delay of when the cargoes arrive in hopes of lower prices.

SovEcon Raises Russia’s Wheat Export Forecast

  • The agency now sees Russia’s wheat exports at 40.8 million tonnes, up one million from the previous forecast.
  • The record export total out of Russia is 40.9 million tonnes, hit in the 2017/18 marketing year.
  • This export forecast takes in mind the fact that export quotas are expected to be enforced later this crop year.
  • SovEcon is forecasting Russia’s wheat crop at 85.3 million tonnes.
  • Corn exports are seen at 3.9 million tonnes and barley exports are forecast at 4.9 million; each total was lowered 300,000 tonnes from the previous forecast .
  • FBN’s Take On What It Means For The Farmer: A larger export program out of Russia is not surprising. The country has the grain and will export. This does not significantly alter the current global trade situation and will keep interest in US exports limited for the near term until Russia’s export program slows.


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