US sells corn and wheat to China, soybeans to undisclosed destinations and stimulates grain market in Chicago

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Amid so much negative news about the effects of the coronavirus pandemic, the grain market has already recorded two consecutive sessions of good increases on the Chicago Stock Exchange in light of the prospect of better demand from China for products from the United States. After rumors commented on the market this Thursday (19), the USDA (United States Department of Agriculture) reported on new sales of corn and wheat to the Asian nation and soybeans to undisclosed destinations.

According to the daily report, there were 756 thousand tons of corn - the entire volume of the 2019/20 harvest - 340 thousand tons of red durum wheat - from the 2020/21 harvest - and another 110 thousand tons of soybeans, also from the 2019 harvest. / 20. Sales with volumes equal to or greater than 100 thousand tons must always be informed to the department.

"Many expect this to be the beginning of the promises of major agricultural acquisitions foreseen in phase 1 of the trade agreement. This is when the world continues to fight the coronavirus," explain analysts at the international consultancy Allendale, Inc.

Yesterday, the market had already received the new weekly export sales bulletin from the USDA (United States Department of Agriculture) with good numbers for corn, with sales exceeding 900 thousand tons.

And these new sales are very important for the US market, which is preparing to start fieldwork for the 2020/21 harvest. And even more, in view of sales that, in the accumulated of the commercial year, present volumes far from those registered a year ago, in the same period.

According to USDA figures, only 29,017.7 million tonnes were committed in the entire season, compared to more than 41 million in the same period of the previous year. In soy, the current volume is 34,999.7 million, while last season, at this time, it was 41,423.0 million tons.

Yesterday, Reuters International had already reported sales of two US soybeans to China, or 120,000 tonnes. "The soy purchases, which were made on Thursday, are for shipments to Pacific ports, probably before the end of April," said traders heard by the news agency.

Analysts and market consultants heard by Notícias Agrícolas have been saying, throughout the week, that China will, in fact, have to turn to the American market, mainly of soybeans due to the low availability of product in Brazil - since about 70 % of the harvest was sold - and Brazilian domestic consumption is also expected to increase in 2020.

"In December 2019 we had a stock of around 4 million tons, if Brazil exports 78 million tons, we should have something close to 1 million tons, that is, a reduction in national stocks of around 75%", explains Marcos Araújo, market analyst at Agrinvest Commodities.

Source: Notícias Agrícolas