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China is Buying US Soybean Again

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Wall Street closed mixed following weak data, and 2 Fed commentors from Jackson Hole

China bought a small volume of US soybean last week after pledging on 5 August to halt purchases of American farm products due to the escalating trade dispute, the US Department of Agriculture data showed Thursday.

The world’s largest soybean importer struck deals from 9-15 August to buy 9,589 tonnes for delivery in the current MY and 66,000 tonnes, approximately 1 cargo, for the MY, the data showed.

“You do have some buying going on,” said the chief commodities economist for INTL FCStone. “It’s a little bit of a surprise.”

China last year imposed retaliatory tariffs that remain in place on imports of US farm products including soybeans and pork. The duties have slashed exports of US crops and prompted The Trump Administration to compensate American farmers for losses over 2 years with as much as $28-B.

China said Thursday it hopes the United States will stop a plan to impose new tariffs, adding that any new duties would lead to a further escalation.

China has largely turned to South America for soybean since the trade dispute began last year. US soybean sales to China in 2018 dropped 74% from the prior year.

Compared to what they used to buy, they essentially have halted, but some have gotten through.

The sales of 9,589 tonnes for delivery in the current MY (marketing year) will probably be rolled ahead to be delivered in the next year, which begins on 1 September.

The cargo sold for delivery in the next marketing year could have been in the works before Beijing said Chinese companies would suspend purchases of US farm goods, said a senior commodity analyst for Futures International.

“The government may have just given the Green Light to say, ‘Let this one go through,'” he said.

One cargo is not going to change the fact that they are not buying millions of tonnes of soybean (but is may be an ice breaker.

Thursday, the major US stock indexes finished at: DJIA +49.51 at 26252.22, NAS Comp -28.82 at 7991.41, S&P 500 -1.48 at 2922.95

Volume: Trade on all US exchanges was 5.65-B/shares, compared to the 7.48-B average for the full session over the last 20 trading days.

  • NAS Comp +20.4% YTD
  • S&P 500 +16.6% YTD
  • DJIA +12.5% YTD
  • Russell 2000 +11.7% YTD

HeffX-LTN’s overall technical outlook for the US major stock market indexes is Neutral with a Bullish bias.

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