Export Sales Solid
- New-crop corn sales were very large at 102.3 million bushels, pushing the top end of market expectations.
- Last week's corn sales included the 76.3 million bushels of previously announced purchases from China.
- Soybean sales of 51.6 million bushels were above market expectations for new-crop.
- Sales of 17.4 million bushels of beans to China were included in last week's activity.
- Wheat sales of 22.2 million bushels were within market expectations, and were again better than year ago sales of 17.9 million bushels.
- China bought 1.1 million bushels of HRS, and there were 1.8 million bushels of white wheat sold to unknown destinations.
- Net sales of 130,800 running bales of new-crop upland cotton were notably higher than the previous week.
FBN’s Take On What It Means: China buying was up noticeably across the board as expected. Total new-crop commitments of corn and soybeans are nearly three times greater than the same period last year, while wheat sales are up about 9%. Large purchases by China are already baked into expectations and will need to continue and hopefully increase to offset increased production this season.
China Soybean Imports Rise
- China's soybean imports through July this year are up 18%, compared with a year ago.
- China imported 10.1 million tonnes of beans in July, up from 8.6 million last year, but below June's record 11.2 million tonnes.
- Soybean imports increased 17.7% in the first seven months of the year to 55.1 million tonnes, compared to the same period in 2019.
- Soybean processors are beginning to struggle with increased inventories.
- Inventories are rising mainly because feed producers bought meal in advance for use in months to come.
- Demand has increased as China continues to rebuild its hog herd following the African swine fever outbreak.
- U.S. soybean sales to China for the upcoming marketing year are currently at a 6-year high.
FBN’s Take On What It Means: China is working through large supplies of soybeans bought from Brazil earlier in the season. Brazil had record high soybean output this year, while the currency depreciated, making Brazilian beans cheap and leading to excellent China crush margins, which in turn encouraged active buying. These factors now favor the US which is the most competitive origin in the world, at least until the next crop is ready in South America early next year.
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