New U.S. Farm Data to Show How Many Soybeans China Is Actually Buying

(Bloomberg) -- The U.S. Department of Agriculture will release six weeks of export sales data Friday, which among other things, will reveal how many soybeans China has recently bought, or not bought.

China has been buying soybeans for the past two months, but no one knows exactly how much they’ve purchased from the U.S. due to the lack of data. That’s made it tough for the industry to assess government forecasts on demand and come up with their own estimates.

“This is one of the real missing pieces to the whole demand story that’ll be filled in,” said Bryce Knorr, an analyst at Farm Futures. “That gives us an idea of what’s actually moved out.”

The U.S. will need to have done “a whole lot of business to China” to reach the government forecast for exports in the 2018 marketing year -- around 35 million bushels a week, which is much more than the U.S. normally sells, Knorr said. At the same time, Brazilian and Argentinian crops are coming to the market, making it more difficult to sell American product. The result could be a “large overhang” of U.S. soybeans, Knorr said.

In its latest forecasts, the USDA said soybean exports to China will total 1.875 billion bushels this season.

China may be buying less as African swine fever eliminates smaller hog producers, and bigger producers are being told to use less protein in their feed supplies, closer to the way the rest of the world feeds hogs, Knorr said. That may permanently affect Chinese soybean demand.

“Once you take the genie out of the bottle, you can’t put it back in,” Knorr said. “They’re not going to start feeding more soybeans than rest of the world if they’ve figured out how to feed with less protein.”

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