China, the world's largest soybean importer, is again showing it's the big dog in the neighborhood. China took 17.2 million bushels of U.S. soybeans in the latest week, according to this morning's USDA export report, helping total sales reach 29.1 million bushels. The strong showing was well above trade guesses, and more than tripled the rate needed to reach USDA's forecast for the marketing year.
Strong Chinese buying could be set to continue, if news reports this morning are true. The government there may go back into the local market to buy 55 million to 110 million more bushels, trying to prop up prices farmers receive. That move in turn could force processors to turn to imports, which are considerably cheaper than domestically raised soybeans.
A similar move earlier this fall kicked off a surge of U.S. sales, helping overcome a slow start to the export season caused by harvest delays and a tight old crop pipeline.
China may also buy more corn to build reserves and boost prices. That may keep surplus corn from hitting the export market in Asia, convincing regular U.S. customers to step up their buying programs. Sales to normally stalwart markets in Asia have been slow this fall, with some end users buying feed wheat and others waiting to see if Chinese exports are available. China recently suspended taxes on exports after Dec. 1, and some officials even suggested export rebates might be available.
U.S. corn export could use a boost. Net new bookings totaled 17.1 million bushels this week, well below the weekly rate near 30 million bushels needed to meet USDA's forecast.
Wheat sales picked up from last week's slack total, as more buyers appear to be coming into the market in search of bargains. Total sales were 18.8 million bushels, more than doubling last week's effort. Japan also bought U.S. wheat at its regular weekly tender, as trade returns to normal following disruptions caused by new regulations put into effect following a scandal over tainted imported rice.