November soybean futures hit the highest level in more than a week with China on a five-day buying spree for U.S. soybeans. China's appetite continued Wednesday with USDA confirming a a sale of 132,000 metric tons for delivery to China during the 2021/2022 marketing year.
The confirmed sale came a day after soybean prices climbed double digits, once again spurred by the string of recent export sales. Two soybean sales this week were also to the tune of 132,000 metric tons to China. That followed a confirmed sale to China on Friday of 131,000 metric ton sale of soybeans. And Thursday, USDA showed sales of 300,000 metric tons to unknown destinations.
"November futures today reached the highest level in over a week and the markets been gotten a bit of a boost from Chinese demand," says Bruce Blythe, market analyst for Pro Farmer. "Recently, we've had five days in a row where USDA announced a purchase from China or unknown destinations. So it appears to be we appear to be seeing some demand interest developing here at these price levels. So that I think is gotten the market's attention and like it's fueled some renewed optimism over our export outlook for the year ahead."
The renewed demand story from China comes as the soybean market is hypersensitive to weather. So, Blythe points out it will be a battle between weather's impact on production and demand.
"August is the critical development month for most of the crop, and we're not through that yet," Blythe adds. "We're getting some extreme heat this week, we're also getting some storms. So, I think unlike corn, the weather is still a critical factor for soybeans in the weeks ahead."
AgDay reported during the first nine months of this fiscal year, the U.S. has exported just over $134.5 billion worth of ag goods, and a large chunk of those exports went to China.
In total, agricultural exports add up to 21% of total sales, and ag exports to China were $28.3 billion. That marks an increase of 155% compared to last year.
However, sales slowed in June, as AgDay reports China's buys dropped from $2.2 billion in May to $1.8 billion in June, a 20% drop.
Pro Farmer Crop Tour Kicks Off Next Week
As the market battles the stories of U.S. production and demand, the Pro Farmer Crop Tour will ground-truth crop production forecasts next week as the 2021 Pro Farmer Crop Tour kicks off Monday morning. The tour provides insights into potential corn and soybean yields and gathers scout reports from 2,000-plus fields across seven states – Illinois, Indiana, Iowa, Minnesota, Nebraska, Ohio and South Dakota.
Register and attend nightly meetings in person or watch the nightly broadcast live at 7 p.m. Central each night where you’ll receive daily results, scouting observations and historical comparison data from our tour leaders.