The purchases were for delivery when the new harvest hits the market early next year, they said.
Some US and Argentinian cargoes were also booked last week by Chinese soybean buyers, one of the traders said, with their taking hold of about 30 shipments in total then.
China is the world’s largest importer and consumer of soybeans; it had been purchasing more than half of all US soybean exports before the trade war between the two countries. After a 16-month-long trade war with the US, soybean stocks are in tight supply in China. In tandem with the tariff tiff, feed demand in the country has been hit due to the pig herd being decimated by African Swine Fever (ASF) outbreak.
“Feed producers and downstream companies are reluctant to build up high inventories as demand is bad,” a purchase manager with a feed producer in northeastern China informed Reuters.
The alleged breakthrough in the China-US trade war, signaled last month, was expected to lift the US soybean market, but there is still a good deal of skepticism from experts on whether, as part of the accord announced early October, that China would significantly step up purchases of US agricultural commodities.
In a report released this week, though, the US Department of Agriculture (USDA) raised its export forecast for China by US$3.5bn from August to Us$11.0bn, due to what it said was higher expected demand for soybeans and pork. “Export sales of both are ahead of the same time last year.”
The US agency forecast, however, that US exports to the Philippines will be down US$100m to $3bn on greater competition from Argentine soybean meal. It said the forecast for Malaysia is down by $200m to US$1.3bn, due to lower expected demand for bulk commodities, especially soybeans.
The export forecasts for Canada and Mexico are unchanged from August at US$21.5bn and US$19.8bn, respectively, it maintains. US exports to the EU are forecast at US$13.3bn, which is US$300m lower than the August projection, again due to reduced demand for soybean and soybean products, said the USDA.
Global impact from Brexit, lack of investment globally, and trade war
In that same report, the agency was lukewarm about the global economic outlook.
“The forecast for per capita world gross domestic product (GDP) growth in 2019 is unchanged from the prior forecast, at an annual rate of 1.5%. However, the forecast for 2020 has been revised downward to 1.5% from 1.6% in the August forecast.
“Forecasts for the US are unchanged from the August forecast, at 1.6% for 2019 and 1.3% for 2020.
“Despite positive consumer sentiment, low unemployment rates, and strong year-over-year wage gains, growth has been moderated by continuing uncertainty in US-China trade, Brexit, and slowing trade and investment globally.”