China Makes Largest US Soy Purchases in Months

China’s Record-Breaking Soybean Purchases

China has made its largest single-day U.S. soybean purchases in at least three months, offering hope for the valuable U.S. farm export. Chinese importers bought around 10 cargoes of soybeans, totaling about 600,000 metric tons, for shipment from Gulf Coast and Pacific Northwest export terminals between December and March. This surge in purchases comes after overseas sales of the 2023 harvest had fallen well behind the normal pace.

Relief for US Farmers

The sales offer relief to U.S. farmers, who have seen Brazil dominate the global export market for soy and corn for longer than usual this year. The purchases would be a much-needed boost for the U.S. soy industry, as Brazil has harvested a record soy crop this year, leading to stiff export market competition and high U.S. prices due to barge shipping disruptions.

Positive Outlook for U.S. Soybean Exports

If confirmed, Tuesday’s sales would be the largest single-day soybean purchases by the world’s top soy importer since late July. These purchases are the latest in a series of soy import deals since late last week by Sinograin, China’s state-owned importer. Total purchases over that time were estimated at as much as 20 to 25 cargoes, according to trade sources.

Impact on U.S. Soybean Prices

The surge in Chinese purchases has led to a jump in cash premiums for U.S. soybeans at Gulf Coast terminals, with exporters scrambling to source supplies. High U.S. prices due to barge shipping disruptions and stiff export market competition from Brazil have hampered U.S. sales in the season so far. However, U.S. prices have become more competitive for shipments from December through March, when Brazil’s next harvest will be available.

Expectations for Future Sales

The USDA has confirmed private sales totaling 236,000 metric tons of U.S. soybeans over the past two days via the agency’s daily reporting system. Traders expect additional “flash sales” following the deals on Tuesday, indicating a positive outlook for future U.S. soybean exports.