USDA: USA sells another 318 thousand tons of soybeans to China this Friday

The USDA (United States Department of Agriculture) reported new sales of soybeans from the country to China this Friday (4) of 318 thousand tons. The volume is all from the 2020/21 harvest and adds to the other 450 thousand tons already reported this week. The Asian nation continues to be very present in the North American market, not only seeking to meet the goals determined in phase one of the trade agreement between Beijing and Washington, but also to meet its growing consumption needs. 

Throughout the week, the market speculated about purchases of at least 480 thousand tons of oilseed by Chinese state-owned companies in the North American market. In Brazil, supply is quite limited, and in China, demand continues to grow. The country has been rebuilding its pig herds after the peaks of African Swine Fever and this is one of the sectors that demands and pulls the most product at the moment.

“I believe there is much more of a need to buy from China than to show good will (to the USA), explained the Managing Partner of Cogo Intelligence Consulting in Agribusiness, Carlos Cogo, in an interview with Notícias Agrícolas this week. “China is buying more and if this is due to the agreement, that is not so important. The importance is that they are buying more”, he adds. 

Therefore, Cogo believes that this recomposition not only encourages larger purchases now, but also signals an increase in Chinese soybean imports next year and beyond. The international consultancy BusinessWire brings a study indicating that the animal feed market in China will grow by 4.06% over the next five years. 

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MARKET IN CHICAGO

Despite the market acting with stability this Friday morning (4), it is still rising and experiencing slight increases on the Chicago Stock Exchange among the most traded soybean positions. Commodity futures rose, around 11:50 am (Brasília time) between 0.50 and 2 points in the main contracts, taking November to US$ 9.68 and March/21 to US$ 9.73 per bushel. 

The gains lead to ten consecutive sessions of advance and the soybean market on the Chicago Stock Exchange also reaches its fourth weekly gain, mainly driven by demand from China in the USA. And as experts explain, it is not just soybeans that are being purchased by the Chinese, but other products – with great emphasis on corn – are also on the agenda and favoring the rise in prices of other commodities. 

While China is buying more, the international market is speculating how much the new North American harvest was lost due to the adverse weather in the USA, especially in August. 

For Steve Cachia, consultant at Cerealpar, “the soybean market on the Chicago Stock Exchange maintains an upward trend despite comments that the failure of the American harvest may not be as large as expected. As a result, demand is once again offering support, with new purchases of American soybeans by China and expectations of higher volumes confirmed in the coming days and weeks.”

Therefore, expectations for the new monthly supply and demand bulletin from the USDA (United States Department of Agriculture) on the 11th are also high for traders. 

Source: Notícias Agrícolas

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