The soybean market was awaiting the final production numbers in the supply and demand report from the U.S. Department of Agriculture, which was due out Jan. 12, but even before the report came out producers knew they had grown a record crop based on previous reports.
“It was a record crop for soybeans,” said Tommy Grisafi, risk management advisor for Advance Trading, Inc., based out of Valparaiso, IN. “It was a record crop, and record demand. China is buying everything they can right now. However, once the South American soybean crop comes in China will start to switch from buying in the United States and buying from South America.
“China last year was very aggressive in buying soybeans in order to make sure they had enough,” he continued. “But now that South America has a big crop they’ll begin buying from there.”
“China is our largest customer. If they quit buying from us we’d be in a world of hurt.”
The Jan. 12 reports estimated the 2016 U.S. soybean crop at 4.3 billion bushels – down 54 million bushels from the December report.
Both harvested area and yield were down slightly. The soybean carryout number was reduced by 60 million bushels.
The 2016/17 U.S. season-average farm price forecast for soybeans is projected at $9 to $10 per bushel cash.
Soybean futures were at $10.64 for March, and $10.26 for November ahead of the Jan. 23 opening.
(Source – http://www.blackseagrain.net/novosti/chinese-demand-for-u-s-soybeans-remains-strong)