CALGARY — Soybean prices remain mired, despite large sales to China and what appears to be a more open chute into that market for American oilseeds.
By early this week the U.S. Department of Agriculture had added up more than 21.5 million bushels of sales to China since the warming of trade relations between the two countries nearly two weeks ago.
Combined with a record domestic soybean crush in U.S. for November, this should have spelled good news for prices. Last month, more than 169 million bu. of soybeans were crushed in the United States, according to the National Oilseed Processors Association in its November report issued Dec. 17 — and that followed a record October crush of 172 million bu.
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Soybean prices at the end of last week turned away from modest weekly gains to fall Dec. 14 to just above US$ 9 for January on Chicago futures markets and $9.14 for March.
American Farm Futures senior grain market analyst Bryce Knorr suggested that any optimism in the market might be tempered with fears of a potential economic recession looming in the not too distant future, and with it, lower American farmers’ incomes.
Added to that, there is a worry that despite the support of the U.S. government for farmers, related to the China-U.S. trade dispute, the missed opportunities to market American soybeans won’t be recaptured, and another Brazilian harvest is pending.
Bruce Burnett of Glacier’s MarketsFarm in Winnipeg suggested that as the new South American crop comes into play, it will potentially further suppress oilseed prices.
The 25 percent Chinese tariff on American soybeans, currently in abeyance, resulted in 56 million bu. in lost sales, moving that country from taking 60 percent of U.S. exports to just four percent.
“Brazil’s beans will be going somewhere, if not China. The large supplies didn’t go away. And that will keep pressure on prices,” said Burnett during the Glacier Farm Forum Event in Calgary earlier this month.
