"For the first time in more than a month", USDA: China purchased nearly 300,000 tons of soybeans
On January 19, local time, the website of the United States Department of Agriculture released a daily report on soybean sales. Data from private exporters showed that the U.S. sold 297,000 mt of soybeans to China for delivery in the 2023/2024 marketing year, the report said.
According to Reuters, the USDA is required to publicly release aggregated sales data obtained from exporters under relevant U.S. regulations. This is the first time since December 19 that the USDA has reported soybean sales under the Daily Reporting Rule, and the first time since December 15 that the USDA has reported soybean sales to China, the world's largest soybean buyer.
China has ordered 20.2 million mt of U.S. soybeans for the 2023-2024 marketing year, which begins Sept. 1, down from 27.2 million mt in the same period last year, USDA data showed. According to data released by the General Administration of Customs of China, from January to December 2023, China's total soybean imports were 99.409 million tons, up 11.4% from 89.218 million tons in 2022.
Screenshot of the announcement on the USDA website
The day before the announcement (18th), Tang Renjian, Minister of Agriculture and Rural Affairs of China, co-chaired the seventh meeting of the Sino-US Joint Committee on Agriculture (hereinafter referred to as the "Joint Committee") with U.S. Secretary of Agriculture Vilsack in Washington.
According to the website of the Ministry of Agriculture and Rural Affairs, the meeting restarted the Sino-US agricultural cooperation mechanism, reaffirmed that the joint committee is an important channel for regular exchanges between the agricultural departments of the two countries, and promised to cherish, carefully care for and stabilize the operation of this mechanism. The two sides had a frank and in-depth exchange of views on climate-smart agriculture, food security, people-to-people exchanges, and trade facilitation.
After the meeting, the USDA issued a statement saying that this was the first meeting of the U.S.-China Joint Committee on Agriculture since 2015. The committee was established in 2003 to coordinate bilateral exchanges and cooperation between China and the United States in agriculture.
U.S. Secretary of Agriculture Vilsack said in a statement that he looks forward to further exchanges and cooperation with the Chinese side to continue to build a relationship "to expand and improve market access opportunities for U.S. farmers and ranchers in China, an important agricultural export market."
US Secretary of Agriculture Vilsack issued a statement
On January 18, Tang Renjian, Minister of Agriculture and Rural Affairs of the People's Republic of China, and Vilsack, Secretary of the U.S. Department of Agriculture, co-chaired the seventh meeting of the U.S.-China Joint Commission on Agriculture. The picture is from the website of the Ministry of Agriculture and Rural Affairs
Reuters mentioned that the order came at a time when crop weather in Brazil, the world's largest producer and exporter, improved after weeks of drought, leading to a decline in global soybean futures. CBOT soybean futures are down 6% since the start of the year, with the benchmark contract falling to $12.01 a bushel this week, the lowest level since 2021.
Brazilian soybean supplies are expected to flood the market in the coming weeks. Reuters, citing analysts and exporters, said the return of Brazilian soybeans would be a shock to the U.S. soybean market, with Brazilian soybean exporters offering $1.50 or more less to shipments in February and beyond.
The mainland is the world's main importer of soybeans, accounting for one-third of international soybean production and more than 60% of global soybean trade. After 2013, Brazil surpassed the United States to become the largest source of soybean imports in the mainland, and the proportion of imports has been increasing.
In July last year, Bloomberg published an article saying that in recent years, "Brazil is taking away more and more share of soybean trade with China from the United States, and even began to control the market in the traditional off-season". According to the article, the increase in Brazil's soybean production has brought a competitive price advantage, and on the other hand, geopolitical tensions have also prompted China to deepen its ties with Brazil and reduce its dependence on the United States.
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