In a positive turn of events for the most valuable U.S. farm export, China has recently made its largest single-day U.S. soybean purchases in at least three months, according to traders. This development comes as overseas sales of the 2023 harvest had been lagging behind the usual pace, raising concerns among U.S. farmers.
Chinese importers have acquired approximately 10 cargoes of soybeans, equivalent to roughly 600,000 metric tons, with shipments scheduled between December and March. These purchases have been made from Gulf Coast and Pacific Northwest export terminals, providing some much-needed relief to U.S. farmers. In recent times, Brazil had dominated the global export market for soy and corn for an extended period, causing challenges for American farmers.
If confirmed, these sales would mark the largest single-day soybean purchases by China, the world's top soy importer, since late July, as per U.S. Department of Agriculture (USDA) daily sales data.
These purchases are part of a series of soy import deals initiated by Sinograin, China's state-owned importer, starting late last week, as reported by export traders with knowledge of the transactions. The total purchases during this period are estimated to be around 20 to 25 cargoes.
The increased demand has caused cash premiums for U.S. soybeans at Gulf Coast terminals to surge by up to 10 cents a bushel as exporters rush to secure supplies.
Challenges such as barge shipping disruptions and stiff competition from Brazil, which achieved a record soy crop this year, had hindered U.S. soybean sales earlier in the season. As of late October, confirmed sales to China were down 35% from the previous year, with sales to all destinations down by 28%. The USDA had projected a 12% year-on-year export decline.
However, U.S. prices have become more competitive for shipments scheduled from December through March, when Brazil's next harvest becomes available.
Over the past two days, the USDA has confirmed private sales totaling 236,000 metric tons of U.S. soybeans through the agency's daily reporting system. Traders are anticipating additional "flash sales" in the wake of the recent deals on Tuesday. This renewed interest from China provides a glimmer of hope for American soybean producers and the U.S. agricultural sector at large.