China does not need U.S. soybeans for state reserves

China does not need U.S. soybeans for state reserves

China does not need U.S. soybeans for state reserves

When the planting season begins in Brazil in September, growers are expected to expand soybean seedings by 2.4 million hectares, leading to a record crop of 120.5 million tonnes in 2018/19, some 2.5% larger than the projected US harvest.

Bunge Ltd and ADM declined to comment. That would still be 1 percent higher than consumption in the 2017/18 crop year.

CNGOIC reported that the soybean planting area in the U.S. reached 36.24 million hectares this year, the second-highest level in history, with the planting area exceeding that of corn for the first time in 40 years.

China National Grain and Oils Information Center said China's 25 percent import tariff on United States soybeans will increase U.S. soybean import costs to between 700 yuan ($105) and 800 yuan per metric ton, which is around 300 yuan higher per ton than the same shipments from Brazil.

Surging Brazilian prices are already steering importers in Europe - such as the Netherlands, Spain and Italy - to buy more USA shipments. The USDA report identified the ongoing trade disputes as the root cause of the soybean export decline. Chinese buyers have not been buying American soybeans at the same rate this year, and producers are leery to ship them for fear the shipment may not be accepted when it reaches China, University of Arkansas agriculture economist Bob Stark told Talk Business & Politics earlier this week. Thailand's record 221,400 tonnes in advance deals are almost 10 times larger than the average over the prior six years. The U.S. crop was projected at 4.310 billion bushels, the second largest ever.

China has been avoiding USA soybeans and shifting its purchases to other countries.

"Pakistan, Mexico, Bangladesh and a few others have bought, and that's kept values supported", said a US soybean exporter who asked not to be named because he is not authorized to speak to media. "But eventually you'll run out of non-China buyers".

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This is leaving several farmers across the US and here in Arkansas in a panic, but hopeful.

"Fortunately, we have seen some sales pick up to other destinations", said Monte Peterson, a soybean farmer in Valley City, North Dakota.

But with farmer margins already razor-thin due to low soybean prices, Chinese demand will be sorely missed this fall, when prices typically enter a seasonal slump, Sutter said.

The ASA once again called on the administration to find a non-tariff solution to address its trade issue with China, such as utilizing soy as the largest agricultural export to help reduce USA trade deficit with China.

USA soya bean prices could fall further after the crops are harvested from September through November if Chinese buyers continue to avoid U.S. soya beans.

Yu said China can also buy more rapeseed, sunflower seeds, and bring in more soybean meal, rapeseed meal, sunflower meal and fishmeal to fill any supply gaps. "We can't imagine a scenario where China does not need USA beans".

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