U.S. soybean export sales are unusually strong in January for both the current 2020-21 marketing year and the upcoming 2021-22 marketing year, boosted by China’s efforts to both feed its growing swine herd and replenish stocks.
China, in the midst of rebuilding its swine herd after the devastation from African swine fever, is buying from Brazilian farmers who are harvesting now, but the Asian powerhouse is also buying old crop and new crop from the U.S.
So far U.S. outstanding net sales of soybeans for the 2021-22 marketing year – the crop that’s months from being even planted – are 892,000 metric tons, according USDA data. That total increased Thursday with a USDA announcement of net sales of 130,000 tons of new crop soybeans for 2021-22 for “unknown destinations.”
As a point of comparison, there were total outstanding net sales of just 183,522 for new crop soybeans at this time a year ago.
While the levels now being reported are not unprecedented, they are higher than they have been in the past four years, says Mac Marshall, vice president of market intelligence for the United Soybean Board and the U.S. Soybean Export Council. Most of those sales are to China and what USDA terms “unknown destinations,” which are frequently also China.
But Brazil is also selling its crop, Marshall told Agri-Pulse. This year’s crop is late coming out of the fields, but it’s already about 58% sold, compared to 43% at this time last year, Marshall said.
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“Anytime you see purchases from multiple origins when it’s not a peak window or prime season, the motivating factor is making sure you have those downstream supplies,” said Marshall.
China’s pork production is going strong, creating one stream of demand, but China is also replenishing stocks that it has been drawing down on for the past several years.
New reports out of China show supplies stored at ports are low, says Marshall.
“I think looking at where the inventories are right now, knowing that some of the port stocks are low, there’s probably some degree of refilling that and eventually the state grain reserves,” he said.
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