China buyers in deals for more than 1 million tonnes of U.S. soy
Chinese buyers signed nine contracts for a total of more than 1 million tonnes (1.1 million tons) of U.S. soybeans at a ceremony in Chicago on Tuesday.
The purchases are for delivery to China, the world’s top soy importer, in calendar year 2015, said a U.S. trader at the ceremony.
The ceremony was held on the first day of the U.S.-China Joint Commission on Commerce and Trade, which runs through Thursday.
Buyers included state importers COFCO and Sinograin Oil Corp as well as Yihai Kerry Group, Chinatex Grains & Oils, Yuntianhua USA Inc and Jiusan USA Inc. They signed deals to buy from Archer Daniels Midland Co, Zen-Noh Grain, Louis Dreyfus [LOUDR.UL], Cargill [CARG.UL], Gavilon and Noble-Agri.
“These contracts were maybe for 100,000 or 200,000 tonnes apiece,” said a U.S. soy trader who requested anonymity. “We know they are going to buy the beans every year, but this type of ceremony really reinforces the relationship with our biggest customer.”
The deals had little impact on soybean futures prices at the Chicago Board of Trade, which languished near the session lows they hit before the ceremony. CBOT January soybeans were down 13-1/2 cents at $10.26 a bushel at 12:10 p.m. CDT (1.10 p.m. ET).
Traders said the agreements were relatively small for China, which is expected to import 74 million tonnes of the oilseed in the 2014/15 marketing year. The U.S. Agriculture Department’s export inspections report issued on Monday showed more than 1.3 million tonnes of soybeans destined for China were inspected in the past week.
Traders do not expect all of the agreed-upon contracts to show up in the USDA’s daily reporting system, which requires exporters to report large sales to a single destination within a day. Some of the signings on Tuesday will remain “frame contracts” with no specified price or shipping terms until a later date.
A similar signing ceremony in Milwaukee in September yielded purchase agreements for 4.8 million metric tons of U.S. soybeans. The USDA confirmed nearly 2 million metric tons in Chinese soy purchases over the next three days.
Michael Boddington from Asian Agribusiness Consulting (AAC) has been involved in agribusiness in Asia since 2000. AAC has office both in Vietnam Ho Chi Minh City and China Beijing. So AAC has a thorough understanding of the Viet Nam and China livestock industry and produces up-to-date research reports on the market. We can offer insights on supply and demand trends and comments on the future structure of Asian agribusiness. If you would like to know more please email This email address is being protected from spambots. You need JavaScript enabled to view it.
Source: http://www.reuters.com/article/2014/12/16/us-china-soybean-deals-idUSKBN0JU2FJ20141216