Large Soybean Supply Keeping Prices Low Despite China Purchases
USDA has confirmed China bought even more soybeans, 1.19 million metric tons worth. It’s the biggest purchase China has made in more than a year, and the ninth-largest purchase in the last ten years. However, it’s not been a big boost to soybean prices.
Chip Nellinger of Blue Reef AgriMarketing told AgDay TV that it’s good to see China once again in the market for U.S. soybeans. The purchases would have had more effect on the market a few months ago because we didn’t know how big the U.S. crop was, as well as the progress of South American soybeans. Nellinger said the fact that we know the answers to both of those questions has taken some of the excitement surrounding Chinese purchases out of the market.
There’s a lot of soybeans still sitting out there to sell yet, both domestically and overseas, which is the biggest challenge to higher prices. Nellinger says, “It’s great that China is buying beans again but we’ve got a lot of beans around the world to still get rid of.”
The latest USDA report put carryover at 955 million bushels. Nellinger says it’s definitely putting a lid on prices. Even if China purchases two-thirds of what USDA trimmed off expectations, there’s still a carryover of about 700 million bushels.
Source; NAFB News