Chinese processors apparently got ready for their week-long Lunar New Year celebration by tidying up a few loose ends – in a very big way.
Strong Chinese interest in U.S. soybeans helped propel a big week of sales, according to USDA's totals released this morning. Businesses will close all next week for the spring festival.
Net new bookings in the last week of January totaled 61.3 million bushels. While brisk new crop business was expected by the trade, the surprise was the strength of 2012 crop bookings. They totaled 32.9 million bushels, including 25.6 million for China. The world's dominant soybean importer also took the lion's share of the new crop deals, which totaled 28.3 million bushels.
Today's strong numbers increase the odds for USDA to raise its forecast of exports in Friday's supply and demand report for February. China needs to slow down its old crop buying soon below 9 million bushels a week, or else it's likely total demand is greater than the government estimates.
Already total sales and shipments to date account for 93% of USDA's forecast for the marketing year, a much stronger pace than average.
The good news for soybeans helped turn around a market that softened overnight. Corn prices remained under pressure following another week of disappointing business. Net new bookings totaled just 7 million bushels, even less than expected, as total sales are on track to set a record low since the modern export era began 40 years ago. China actually took two loads, though the deals were switched from purchases originally designation as going to unknown destinations.
Wheat business was also poor, with only 11.1 million bushels of new sales put on the books, below trade guesses and the rate forecast by USDA for the marketing year. Buyers continue to take small amounts, purchasing hand to mouth as they try to get by until 2013 grain starts hitting the market this spring.
Both corn and wheat sales are slow enough that USDA could trim its forecast for marketing year sales, boosting carryout modestly.