Private exporters on Wednesday confirmed new sales to China. The Asian nation purchased 396,000 metric tons of soybeans. Half of the sale is old crop, while the other half is new crop.
Jim McCormick, branch manager of Ag Market Net, says this is “a good sign,? and believes China remains committed to fulfilling Phase One trade agreements, despite beliefs about the nation wanting to renegotiate terms of the agreement.
?They?ve been aggressive in buying the last couple of weeks. I have to admit, I was a little bit surprised yesterday when the government lowered old crop sales of beans,? McCormick said. ?Maybe there?s a shot they?ll bring those back up, if the sales heat up as we move through the heart of summer.?
U.S. Department of Agriculture (USDA) officials increased old crop soybean ending stocks by 100 million bushels (mbu), due to a decline in exports. Officials pegged the new crop soybean carryout at 405 mbu.
?The ending stock numbers are tightening up for beans, and that gives beans a play to make a decent push,” McCormick said. “I have a target backed up to at least the nine-dollar level on new crop beans with export demand from China right now.”
China also plans to purchase more corn from the United States. McCormick says, ?Demand looks good right now.” He hopes today?s sale is the ?first of many.?
?I can’t stress this enough…Economically, it make sense for China to buy our corn. They are selling corn out of their reserves near five-year highs and buying our corn at 10-year lows. It makes economic sense to see demand start to pick up, and hopefully that?ll allow us to get this seasonal bounce in,” McCormick said.
