August 29, 2008

China has cancelled more soy purchases from the US although new crop purchases still top cancelled shipments, according to the latest weekly export sales report for the USDA.

The report said China cancelled 8.8 million bushels of 2007 crop purchases from the US, and put on only 3.3 million bushels of new crop business.

Net old crop soy sales dropped as a result by 7 million bushels. However, good new crop sales were noted, with the total sales for the week at 19.5 million bushels, much better than expectations.

Reports of Chinese cancellations and outright defaults have risen in recent weeks, as huge stocks of Argentinean soy, recently released from a farmer-imposed export ban, became much cheaper than that provided by the US.

Reports suggest Argentina could have between 25 percent and 40 percent of its old crop beans still on hand.