November 21, 2008

 

China still a strong market for US soy exports
 
 

China has once again proved itself as a strong and reliable market for US soy exports, purchasing 17.2 million bushels of US soy in the latest week, said USDA.

 

China's purchase boosted total US soy sales to 29.1 million bushels. The strong purchase was well above trade estimates, and more than tripled the rate required to reach USDA's forecast for the marketing year.

 

China is seen to continue their aggressive buying of US soy. The Chinese government may also buy 55-110 million bushels of domestic soy to boost local prices, which would force processors to turn to cheaper imports.

 

A similar move earlier this fall pushed up US sales, helping to overcome a slow start to the export season caused by harvest delays and a tight old crop pipeline.

 

China may also buy more corn to build reserves and boost local prices, lowering corn supplies for the export markets in Asia, which is also likely to force Asia to turn to US supply.

 

US corn exports could use a boost, as purchases totalled 17.1 million bushels, far below the weekly rate near 30 million bushels needed to meet USDA's forecast.

 

In addition, wheat sales also improved from last week's slack trade, as more buyers enter the market in search of bargains amid the financial crisis. Total sales reached 18.8 million bushels, more than double from last week.