The U.S. Department of Agriculture on Thursday reported strong demand for domestic agricultural products, particularly corn and soybeans. A closer look at sales activity in the program below.
The weekly Export Sales report looked “awfully good,” shares Brian Grossman, market strategist with Lakefront Futures & Options.
U.S. corn sales came in at 1.46 million metric tonnes, with U.S. soybeans at 1.72 million metric tonnes. Jim McCormick, branch manager of AgMarket.Net, says posted sales for the week ending September 12 reflect “good faith purchases” by China.
“That’s a good sign; we’re seeing a little bit of demand. The next question is going to be, ‘Can we make a little bit of progress,’”McCormick says. “The U.S. and China have begun their thirteenth round of negotiations. Hopefully they can at least break up this logjam and make a little bit of progress.”
Grossman remains encouraged by China’s presence in the market. He believes the recent influx of shipments speak volumes.
“Just this last week, they took 204,000 metric tonnes of soybeans. We are by far the cheapest in the world, so tariff or no tariff, we are the better place to go,” Grossman said. “They were in the books for 593,000 and unknown, the second largest buyer, was at 427,000.”
China also purchased 800 metrics tonnes of U.S. pork. McCormick and Grossman both have reason to believe China will be more present in the U.S. agricultural market in coming weeks.
“I think they are going to continue to buy U.S. soybeans, simply because we are the cheapest on the market. Brazil is looking at a drought right now, so the possibility of a short crop in South America is evident. I think China is going to continue these good faith purchases, not only because they might need it, but because it’s also a way to save faith and try to prod along the U.S. Administration on making some compromises,” Grossman said.