December 20, 2012

China aborts soy purchase from the US

China has cancelled a previous purchase of 300,000 tonnes of soy for delivery in 2012-13, the current marketing year that began September 1, as reported by the USDA on December 18, 2012.

Also, there was a cancellation of 120,000 tonnes of soy sold to "unknown destinations" for delivery in 2012-13. At the same time, "unknown destinations" bought 110,000 tonnes of soy for delivery during 2012-13, and on December 17 bought 91,000 tonnes of soy for delivery in 2012-13 and 60,000 tonnes for delivery in 2013-14, according to the USDA.

"Unknown destinations" often is interpreted to be China, although that is not sure until destinations are revealed and/or changed closer to shipment. Strong export sales of US soy this fall have been supportive to US soy futures prices.

Forecast record soy production in South America in 2012-13, with harvest typically beginning later in the first quarter, and current favourable weather there, also weighed on futures prices and are expected to slow foreign demand for US soy in coming months.