Soybean futures traded higher on Thursday after the US government reported strengthening Chinese demand of American crops. Despite renewed US-China relations, Beijing has pledged to adhere to the provisions inside the phase one trade agreement, which includes buying more US agriculture. Soybean prices have been rebounding since domestic crop conditions deteriorated in the last week.
November soybean futures picked up $0.0775, or 0.88%, to $8.905 per bushel at 18:01 GMT on Thursday on the Chicago Board of Trade (CBoT). Soybean prices are on track for a weekly loss of more than 1%, but they have gained some momentum on the fundamentals. Year-to-date, the agricultural commodity is down close to 7%.
According to the US Department of Agriculture (USDA), China ordered 522,000 tons of soybeans as part of a flurry of activity from the world’s soybean producer. The USDA added that another 351,000 tons of soybeans were sold to buyers in unknown destinations, but industry observers say those purchases were likely going to be shipped to Beijing.
Overall, weekly soybean export sales to China were a little more than 380,000 tons. This is the smallest level since the middle of April. USDA noted that China had imported approximately $6 billion worth of US agriculture from January to May, which falls short of the $50 billion Beijing agreed to buy in 2020 and 2021.
In a separate report, the USDA said that Brazil is projected to export a record high volume of soybeans in the 2020-2021 marketing season amid huge inventories and a favorable exchange rate. The Brazilian real has been the worst-performing currency this year.
Researchers say that the nation’s soybean exports will top 84 million metric tons, beating the previous record of 83.7 million metric tons in the 2017-2018 marketing year. Output is also projected to be the biggest on record, with 130 million metric tons. This would represent a 6% increase from the previous year. China is still considered to be the biggest importer of Brazil’s products.
In other agricultural commodities, August corn futures tacked on $0.045, or 1.38%, to $3.3075 per pound. August wheat futures tumbled $0.155, or 2.81%, to $5.3525 a bushel. August coffee futures were unchanged at 98.35 cents per pound.