Chinese cancellations of U.S. soybean orders for the week ended April 26 resulted in a decline of 133,700 metric tons in net sales to China, USDA Foreign Agricultural Service data showed Thursday.
although 66,000 metric tons of those soybeans were sent to Vietnam instead, the data showed.
Meanwhile, the U.S. sold 82,700 metric tons of soybeans in brand new sales to Mexico, 68,800 to Taiwan, 60,000 to Argentina in addition to 52,0 to the Netherlands. Although Argentina can be the third-largest exporter of soybeans, a severe drought has reduced production by 7 million tons to 40 million, according to USDA estimates.
“that will just goes to show we’re not dependent on China for soybean exports,” said Michael Stumo, head of Coalition for a Prosperous America, a nonprofit representing the interests of those in manufacturing, agriculture in addition to labor unions.
“China buys so much soybeans they will be unable to avoid the U.S. market anyway,” Stumo said.
Soybean futures are up 9.5 percent This specific year following planned Chinese tariffs on the U.S. product in addition to different goods in retaliation for the Trump administration’s proposed duties on $50 billion worth of Chinese imports. The futures rose nearly 1 percent in Thursday trading.
The lack of Chinese purchases in April also reflects a seasonal slowdown in demand.
“We are at This specific point into the season where China almost exclusively buys coming from Brazil,” said Ted Sefried, chief market strategist at brokerage Zaner Ag Hedge.
“We would certainly expect China cancellations of switches of origin, unless there was a big problem with the Brazilian crop, which there can be not This specific year,” he said.
Net sales of US soybeans to China tend to fall off within the first half of the year
Source: Thomson Reuters, US Census Bureau
In fact, U.S. soybean exports overall to China were anticipated to decline within the current marketing year, which ends Aug. 31, due to a historical low in U.S. soybean protein content, Allendale’s Nelson said.
The real worry, he said, can be whether China reduces its demand for U.S. soybeans within the coming marketing year, which begins Sept. 1.
So far, USDA data indicates China has been increasing orders for that will year, in addition to has 1.02 million tons of U.S. soybeans on the books.
— CNBC’s Aditi Roy contributed to This specific report.