China Possibly Stockpiling U.S. Soybeans

Chinese demand for U.S. soybeans is improving. Michael Cordonnier with Soybean and Corn Advisor says lower soybean prices are generating business.

“Imports have picked up for sure, and you know what they say, ‘low prices cure low prices.’ So, they’re very savvy traders, they saw these low prices and took advantage of the situation. And they may be stockpiling.” Cordonnier says that’s because of potential trade disruptions based on the upcoming election, as well as dry conditions delaying soybean planting in central Brazil.

He says, “That’s going to give them maybe a couple of weeks longer window for U.S. exports before South America comes online.”

EDITOR’S TAKE:

It’s an interconnected world when it comes to agriculture. Weather problems in Brazil create selling opportunities for the U.S. China is just now returning to U.S. markets as they hedge their bets for soybean demand in their country. It is encouraging to see the increased sales to China, especially since the U.S. market has been in a downward trend of late. Their purchases will provide a little boost to the soybean market. That will put farmers in a better mood, one where they might like to get their existing trucks serviced at your dealership.