China’s not yet buying new crop soybeans from the U.S. as fast it did at this time last year, but U.S. sales are still historically strong and increasing quickly in August.
Up until Aug. 5, China had contracted to buy roughly 4.7 million tons of U.S. new crop soybeans for delivery in the 2021-22 marketing year, according to USDA data compiled by Mac Marshall, vice president of market intelligence at the United Soybean Board and U.S. Soybean Export Council. That’s more than 5 million tons less than the level of new crop purchases by China at the same time last year, but the current pace is still solid.
While the pace of U.S. sales to China isn’t as high as last year — a situation that Marshall calls “an aberration” — it is on track to be a strong year for sales and exports.
“Where we are with China sales in terms of the new crop marketing year — it’s ahead of where we were positioned this time five years ago in advance of the 2016-17 marketing year, which was our record year of exports to China,” Marshall said.
USDA announcements of export sales for new crop soybeans to China continue to pile up. Since Aug. 5, USDA has announced sales of 851,000 tons of U.S. soybeans to China for delivery in the 2021-22 marketing year. That includes Chinese commitments for: 131,000 tons on Aug. 6; 132,000 tons on Aug. 10; 132,000 on Aug. 11; 132,000 on Aug. 12; 126,000 on Aug. 13; and 198,000 metric tons on Tuesday, Aug. 17.
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Furthermore, USDA has been also announcing a lot of soybean export sales for “unknown destinations.” While some of that is likely going to Europe, a lot is likely going to eventually be shipped to China, said John Baize, an analyst for the U.S. Soybean Export Council.
The latest report for new crop soybeans going to “unknown destinations” was published Tuesday by USDA and the announcement was for 132,000 tons. USDA has reported a total of 1.322 million tons going to “unknown destinations” since July 29.
Both Marshall and Baize pointed to low crush margins in China as one factor for why Chinese purchases of new crop soybeans are not yet as strong as some were expecting.
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