China Procures Largest Quantity of Soybeans from USA in 3 Months

On Nov 7, China made its largest single-day purchase of U.S. soybeans in at least three months, traders said, providing a glimmer of hope for the most valuable U.S. farm export after overseas sales of the 2023 harvest fell well behind the normal pace. Between December and March, Chinese importers purchased approximately ten cargoes of soybeans, or approximately 600,000 metric tonnes, for shipment from Gulf Coast and Pacific Northwest export terminals, according to trade sources.

The sales would be welcome news for American farmers, who have seen Brazil dominate the global export market for soy and maize for longer than usual this year. If confirmed, Nov 7th sales would be the largest single-day soybean purchases by the world's top soy importer since late July, according to U.S. Department of Agriculture (USDA) daily sales data.

According to three export traders with knowledge of the transactions, they were the latest in a series of soy import deals struck by Sinograin, China's state-owned importer, since late last week. According to two traders, total purchases during that time period were estimated to be between 20 and 25 cargoes. Cash premiums for US soybeans at Gulf Coast terminals increased by up to 10 cents per bushel on Tuesday as exporters scrambled for supplies, traders said.

High US prices as a result of barge shipping disruptions and stiff export market competition from Brazil, which harvested a record soy crop this year, have hampered US sales so far this season. Confirmed sales to China as of late October were down 35 per cent from a year ago, and sales to all destinations were down 28 per cent. The USDA is currently projecting a 12 per cent year-on-year export decline.

But U.S. prices have become more competitive for shipments from December through March, when Brazil's next harvest will be available. The USDA has confirmed private sales totaling 236,000 metric tons of U.S. soybeans over the past two days via the agency's daily reporting system. Traders expect additional "flash sales" following the deals on Tuesday.